RGC Resources Reports $5.27 Million Net Income and 12% Revenue Growth

RGC Resources, Inc. reported a net income of $5.27 million for the three months ending December 31, 2024, reflecting an increase of 5% compared to $5.02 million in the same period last year. The company's total operating revenues rose to $27.29 million, a 12% increase from $24.42 million in the prior year, primarily driven by higher gas utility revenues, which increased by approximately $2.87 million to $27.26 million. This growth was attributed to the implementation of new non-gas base rates and an increase in delivered volumes, despite a decrease in weather normalization adjustment (WNA) revenues.

The financial performance of RGC Resources showed significant changes compared to the previous fiscal period. Operating expenses also increased, totaling $19.96 million, up from $17.77 million a year earlier. The rise in expenses was largely due to higher costs of gas, operations and maintenance, and taxes other than income taxes. The gross utility margin improved to $15.56 million, up from $14.29 million, indicating a positive impact from the new non-gas base rates and increased SAVE and renewable natural gas (RNG) revenues.

Strategically, RGC Resources has made notable advancements, including the operational commencement of the Mountain Valley Pipeline (MVP) in June 2024, which is expected to enhance the company's distribution capabilities. The company also filed for a general rate increase in February 2024, which was settled in October 2024, allowing for an annual incremental revenue requirement increase of $4.08 million. Additionally, the company has been actively investing in infrastructure projects under its SAVE Plan, which has contributed to increased revenues.

Operationally, RGC Resources serves approximately 63,400 customers in the Roanoke area, with total delivered volumes increasing to 3.50 million decatherms (DTH) for the quarter, up from 3.02 million DTH in the previous year. The company reported a 10% increase in heating degree days, which contributed to higher residential and commercial gas consumption. 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 investments and regulatory approvals. The company expects to benefit from the operational efficiencies gained through the MVP and ongoing infrastructure projects. However, management has noted potential challenges related to market conditions and the need for refinancing upcoming debt obligations, which could impact liquidity. The company is currently in discussions with lenders to address these financial needs, emphasizing a proactive approach to maintaining its operational and financial stability.