CHESAPEAKE UTILITIES CORP Q1 FY2025 earnings call

Quarterly Performance: Adjusted earnings per share was $2.22, up 6% from Q1 2024, and full-year 2025 adjusted earnings per share guidance reaffirmed at $6.15 to $6.35. $113 million already invested in 2025 capital growth plan. ### Growth Drivers: Customer growth in Delmarva (+4%) and Florida (+3%) driven by population migration, new communities, and system expansions. Focus on three growth strategy pillars: prudent capital deployment, proactive regulatory agenda, and business transformation. ### Regulatory Agenda: Maryland base rate increase approved, Delaware settlement agreement in principle, Florida rate case settlement reached. Florida City Gas updated depreciation study filed. ### Business Transformation: Completed 1CX project transitioning Florida City Gas to SAP system. Initial stages of company-wide enterprise resource plan launch for improved functions. ### Stakeholder Engagement: Published 2024 annual report, held 2025 Investor Day, investors supported all proposals at annual meeting, and continue to invest in communities.

For the first quarter of 2025, the Regulated segment had an adjusted gross margin of approximately $128 million, up 8% from the first quarter of 2024. The Unregulated Energy segment demonstrated substantial growth with adjusted gross margin up 18% to approximately $54 million in the first quarter of 2025. Delmarva customer growth was up nearly 4% and Florida increased by 3% relative to the same period last year, driven by population migration, new residential communities, and system expansions.

Reaffirmed full-year 2025 adjusted earnings per share guidance of $6.15 to $6.35. 2025 capital growth plan is $325 million to $375 million, with $113 million invested in Q1. WRU project delay shifted in-service date to second quarter of 2026, affecting margin timing. Most major capital projects expected to come into service in third and fourth quarters of 2025, leading to back-end weighted incremental margin.

Tariffs creating uncertainty impacting project costs, as seen in WRU project with increased costs. Labor availability constraints in Maryland affecting project timelines and costs. Macroeconomic uncertainties potentially impacting investment plan and operations.

Q: Tate Sullivan asked about natural gas infrastructure in Florida for the space industry and regulatory developments.

A: Jeff Householder mentioned Virginia grant for Wallops Island infrastructure, ongoing meetings with state and NASA, and intent to serve space facilities.

Q: Chris Ellinghaus asked about tariffs and their effect on business/supply chains, and WRU margin delay.

A: Jeff Householder said few tariff issues experienced, but WRU project cost increase partially due to tariffs and labor constraints; operationally managing margin loss.

Q: Paul Fremont asked about FGC gas depreciation case optimal settlement time and Fitch ratings downgrade threshold.

A: Jeff Householder said likely late third quarter/early fourth quarter for settlement; Beth Cooper said Fitch views downgrade around FFO leverage 4.8.

Q: Nicholas Campanella asked if Chesapeake can hit guidance without WRU margin.

A: Jeff Householder said intend to be in guidance range, Beth Cooper mentioned capital projects and target capital structure impact on EPS guidance.