SUGAR LAND- Industrial Info -September 11, 2012–Researched by Industrial Info Resources (Sugar Land, Texas)–Leading natural gas services distributor Piedmont Natural Gas Company (NYSE:PNY) (Charlotte, North Carolina), which primarily serves North Carolina, South Carolina and Tennessee, reported seasonal losses in the third quarter of 2012, although overall results improved considerably from the same quarter of last year. The company cited stronger base rates in Tennessee and residential and commercial customer growth as the major factors for the gains. Piedmont reported a net loss of $4.61 million for the quarter, compared with a net loss of $8.7 million in third-quarter 2011.
“Due to the seasonal nature of our business, we typically experience losses during the summer months that make up our third quarter,” said Thomas Skains, the president, chairman and chief executive officer of Piedmont, in a conference call. He later added, “We continue to be encouraged by customer growth in our service area.”
Total operating revenues were reported to be $161.12 million, an 18.33% decrease from the same period last year. Piedmont added 2,670 customers during the quarter and has added more than 8,700 customers year-to-date, which is a gain of about 21% from the first nine months of 2011.
Lower gas costs increased customer usage for SouthStar Energy Services (Atlanta, Georgia), a multistate, full-service provider of natural gas supply, transportation and related services that Piedmont co-owns with AGL Resources Incorporated (NYSE:GAS) (Atlanta), which helped to boost pre-tax income from joint ventures by $500,000. Adding to that total was about $300,000 in increased contributions from the Cardinal Pipeline, which is part of the recently completed Wayne County project, now in service. Altogether, pre-tax income from joint ventures increased about $900,000, or nearly 40%.
Operations and maintenance expenses saw a $5.9 million increase, which related largely to higher payroll and employee benefits, as well as contract labor expenses related to pipeline safety activities and improving work processes.
Among the Piedmont projects in North Carolina that are being tracked by Industrial Info are the $160 million construction of a grassroot natural gas pipeline and the $25 million construction of a natural gas compressor station. As part of a larger, $217 million natural gas pipeline project, Piedmont will install 133 miles of 36-inch-diameter transmission pipe to deliver up to 350 million standard cubic feet per day of natural gas from Richmond County to the 620-megawatt Louis V. Sutton power generation facility in Wilmington. Also as part of the project, Piedmont will construct buildings and install two Caterpillar engine-driven reciprocating gas packages for a natural gas compressor station 12 miles east of Lumberton, North Carolina.
“With four projects behind us, our effort now is focused on the Sutton project, the largest of all of the projects,” Skains said in the conference call. “The major materials have all been received for that project, and we broke ground last quarter. The project construction is going well, and Sutton remains on schedule for its targeted in-service date of June 2013.”
Piedmont executives continue to expect a 1% gross customer addition growth rate for full-year 2012. Capital expenditures are expected to total between $270 million and $290 million for 2012, and between $75 million and $85 million for full-year 2013.
“We’re encouraged that growth was across all categories and every quarter this year,” Skains said. “We believe our growth trend reflects an improvement in the construction markets in our service territory–and they certainly reflect the competitive pricing dynamics of natural gas compared to other fuels in our conversion markets. As a result, we anticipate modest continued improvement in customer growth.”