Revenue for Q1 2024 was reported at $149.4 million, marking a 9% increase from $137.3 million in Q1 2023.
Net income for Q1 2024 slightly increased by 1% to $11.7 million from $11.5 million in Q1 2023.
Diluted earnings per share (EPS) for Q1 2024 were reported at $0.36 compared to $0.37 in Q1 2023.
The revenue increase was primarily driven by rate increases in California and Maine, and an infrastructure recovery mechanism in Connecticut. A total of $10 million from rate and infrastructure adjustments and $2.6 million was attributable to higher usage and customer growth.
Water production expenses increased by 10% compared to Q1 2023, mainly due to higher customer usage and rate increases from water wholesalers in California.
Total other operating expenses saw a 7% year-over-year increase, attributed primarily to increases in depreciation, amortization, and higher administrative and general costs.
Future Guidance
SJW Group reaffirms its 2024 guidance of net income per diluted share in the range of $2.68 to $2.78.
Equity issuance is expected to be approximately $55 million to $65 million to support the capital investment program, excluding acquisitions.
The five-year capital investment outlook is maintained at $1.6 billion, which includes around $230 million estimated for PFAS remediation.
The guidance factors include a return on equity increase in California, constructive regulatory decisions, strategic reinvestments in the business for 2024, and consistent alignment with the long-term growth rate of 5% to 7%.
Trends, Market Conditions, Sentiment
SJW Group is navigating a regulatory environment with a strong focus on meeting drinking water and environmental regulations, emphasizing its commitment to public health and environmental stewardship.
The utility is progressing with substantial infrastructure investments ($69 million in Q1 2024) aiming at enhancing water quality and service reliability while managing escalating operational costs.
Rate increases and infrastructure recovery mechanisms in multiple states indicate positive regulatory outcomes allowing for revenue growth necessary to cover the rising costs of water production, infrastructure upgrades, and expansion.
The anticipated cost savings from capital sourcing and leveraging national scale ($1.5 million in 2024) reflect strategic operations management and efficiency improvements as key to maintaining competitive financial performance.
PFAS (Per- and Polyfluoroalkyl Substances) treatment remains a significant capital expenditure focus, with the company actively pursuing cost recovery and minimizing customer impact.
The utility is focusing on sustainable practices and environmental responsibility, reducing greenhouse gas emissions and advancing solar generation, energy storage systems, and fleet electrification.
Notable Quotes
”We met drinking water and environmental regulations, delivered on our public health and environmental stewardship commitments.” - Eric Thornburg, Chair, President, and CEO
”Investing $69 million in water and wastewater utility infrastructure…benefiting customers by executing our capital sourcing initiative and leveraging our national scale.” - Eric Thornburg
”We reaffirm our stated long-term growth rate of 5% to 7%…supported by strategic reinvestments in the business in 2024.” - Andrew Walters, CFO
”Our people are what makes the difference at SJW Group…commitment to serving customers and communities, the environment, and shareholders will continue to excel SJW Group’s ability to deliver value.” - Eric Thornburg
