RGC Resources Inc. Reports 12% Revenue Growth and 19% Increase in Net Income for Q2 Fiscal 2025

RGC Resources Inc. reported a notable increase in financial performance for the second quarter of fiscal 2025, with total operating revenues reaching $36.5 million, a 12% increase from $32.7 million in the same period last year. The gas utility segment contributed $36.4 million, up from $32.6 million, while non-utility revenues slightly decreased to $26,161 from $27,045. The company's net income for the quarter was $7.7 million, or $0.74 per share, compared to $6.4 million, or $0.63 per share, in the prior year, reflecting a 19% increase in profitability.

The increase in revenue and profitability can be attributed to the implementation of higher non-gas base rates effective July 1, 2024, which added approximately $3.6 million to non-gas volumetric revenues. Additionally, the company experienced a 21% increase in heating degree days, leading to a 17% rise in residential and commercial gas volumes. However, this growth was partially offset by a decrease in revenues from the Weather Normalization Adjustment (WNA), which fell significantly due to more favorable weather conditions compared to the previous year.

RGC Resources has also made strategic advancements, including the continued investment in its SAVE infrastructure projects, which resulted in an increase of approximately $283,000 in SAVE-related revenues for the quarter. The company is actively involved in the Mountain Valley Pipeline (MVP) project, which began commercial operations in June 2024. This project is expected to enhance the company's operational capacity and revenue generation. The company received approximately $1.8 million in cash distributions from its investment in the MVP during the first half of fiscal 2025.

Operationally, RGC Resources serves approximately 63,700 customers in the Roanoke area, and its total assets increased to $326.4 million as of March 31, 2025, up from $320.7 million at the end of the previous fiscal year. The company reported a significant increase in accounts receivable, reflecting higher sales volumes, and a reduction in customer credit balances. The company’s employee headcount remained stable, supporting its operational needs as it continues to expand its service offerings.

Looking ahead, RGC Resources anticipates continued growth driven by its strategic initiatives and regulatory mechanisms designed to stabilize earnings amid fluctuating weather conditions and natural gas prices. The company is focused on refinancing its debt obligations and maintaining liquidity to support its capital projects and operational needs. Management remains optimistic about the future, citing positive discussions with lenders regarding refinancing options and the expected benefits from the MVP's operational phase.