New Jersey Resources Corporation Reports Strong Fiscal 2025 First-Quarter Results and Operational Milestones
Regulatory and Operational Highlights
New Jersey Resources Corporation (NJR) has announced its financial results for the first quarter of fiscal 2025, which ended on December 31, 2024. The company has achieved significant operational milestones, reflecting its strategic positioning and long-term growth trajectory.
One of the key highlights during this quarter was New Jersey Natural Gas’ (NJNG) successful receipt of approval from the New Jersey Board of Public Utilities (BPU) for the settlement of its base rate case. This approval granted a $157 million annual increase in base rates, effective as of November 21, 2024, strengthening the company’s ability to continue investing in infrastructure and customer service enhancements.
In another major development, NJNG secured BPU approval for its next-generation energy efficiency program, SAVEGREEN®, which includes an ambitious $385.6 million investment. This new program commenced on January 1, 2025, and will run through June 30, 2027, marking a significant commitment to sustainability and energy conservation for NJNG customers.
Further solidifying its position in the energy sector, Clean Energy Ventures (CEV) completed the sale of its 91-megawatt (MW) residential solar portfolio for a total of $132.5 million on November 25, 2024. This strategic divestment was a key factor in the company’s strong financial performance for the quarter.
Financial Performance Highlights
For the fiscal 2025 first quarter, New Jersey Resources reported a consolidated net income of $131.3 million, or $1.32 per share, compared to $89.4 million, or $0.91 per share, for the same period in fiscal 2024. This represents a substantial year-over-year increase in both earnings and earnings per share.
Additionally, New Jersey Resources’s consolidated net financial earnings (NFE), a non-GAAP financial metric, stood at $128.9 million, or $1.29 per share, for the first quarter of fiscal 2025, compared to $72.4 million, or $0.74 per share, for the same period in the previous year. This notable increase in NFE was driven by positive contributions across all business segments, with a particularly strong performance from NJNG due to the new base rates and a gain on the sale of assets from CEV’s residential solar portfolio.
Fiscal 2025 Outlook
Looking ahead, New Jersey Resources has maintained its long-term growth target, forecasting net financial earnings per share (NFEPS) growth of 7 to 9 percent, with a fiscal 2025 NFEPS target of $2.83 per share. However, due to the one-time gain from the sale of CEV’s solar portfolio, the company has revised its NFEPS guidance for fiscal 2025 to a range of $3.05 to $3.20 per share, which exceeds the target based on its long-term growth expectations.
Steve Westhoven, President and CEO of NJR, commented, “We are off to a strong start in fiscal 2025, with positive financial performance and strategic achievements across all business segments. The increase in our base rates at NJNG and the sale of CEV’s solar portfolio demonstrate the value of our diversified portfolio and physical infrastructure. We remain well-positioned to meet our fiscal 2025 guidance and continue delivering value to our shareholders.”
Segment Performance and Key Metrics
Below is a breakdown of the first-quarter performance by New Jersey Resources’s business segments:
- New Jersey Natural Gas (NJNG): NJNG reported net financial earnings (NFE) of $66.9 million for the first quarter of fiscal 2025, a significant increase from $51.4 million in the same period last year. This growth was primarily driven by higher utility gross margins resulting from the newly implemented base rates.
- Customer Growth: As of December 31, 2024, NJNG serviced approximately 586,000 customers, up from 583,000 at the end of fiscal 2024. New customer additions in the first quarter are expected to contribute approximately $2.0 million in incremental utility gross margin on an annualized basis.
- Base Rate Increase: On November 21, 2024, the BPU approved a $157 million annual increase to NJNG’s base rates, which is expected to contribute significantly to NJNG’s earnings moving forward. The base rate increase includes a return on rate base of 7.08 percent and a common equity ratio of 54.0 percent.
- Infrastructure Investment Program: NJNG continued to advance its $150 million accelerated infrastructure investment program, spending $10.4 million in the first quarter on distribution system reinforcement projects.
- Energy Efficiency Programs: The SAVEGREEN® program invested $18.6 million in energy efficiency upgrades for customers, with $4.9 million recovered during the first quarter.
- Clean Energy Ventures (CEV): CEV reported a substantial increase in NFE to $48.1 million for the first quarter of fiscal 2025, compared to $10.5 million in the prior year. This jump was mainly attributed to the gain on the sale of CEV’s residential solar portfolio.
- Solar Capacity Update: During the first quarter, CEV placed 2 commercial solar projects into service, adding 10.5 MW to its total installed capacity. As of December 31, 2024, CEV’s total commercial solar capacity stood at 396 MW.
- Sale of Solar Portfolio: In November 2024, CEV completed the sale of its 91 MW residential solar portfolio for $132.5 million, generating a pre-tax gain of $54.9 million.
- Storage and Transportation: Storage and Transportation reported NFE of $5.7 million for the first quarter of fiscal 2025, compared to $3.6 million in the previous year. The increase was driven by higher operating revenues and reduced operating expenses.
- Energy Services: Energy Services maintained stable performance with NFE of $7.8 million, consistent with the first quarter of fiscal 2024.
- Home Services and Other Operations: This segment saw an improvement in NFE, reporting $0.6 million for the first quarter of fiscal 2025, compared to a loss of $0.6 million during the same period last year.
Capital Expenditures and Cash Flow
New Jersey Resources is committed to maintaining a strong financial profile and continued investing in its infrastructure and growth initiatives:
- Capital Expenditures: During the first quarter of fiscal 2025, New Jersey Resources invested $149.6 million in capital expenditures, an increase from $118.1 million during the same period in fiscal 2024. The rise in capital expenditures was primarily due to higher spending at NJNG.
- Cash Flow: Cash flows used in operations during the first quarter were $9.0 million, compared to cash flows from operations of $46.4 million in the prior year. This decrease was mainly due to changes in the mix of working capital components.
