Although quarterly net income for AGL Resources declined sharply from $17.4 million last year to $4.8 million for the quarter ending Sept. 30, the company said it posted record earnings for its fiscal year ending Sept. 30. Net income for the year was $88.9 million ($1.63 per share) compared with net income of $71.1 million ($1.29 per share) for the prior fiscal year.

The company attributed the record financial performance to contributions from the acquisition of Virginia Natural Gas (VNG), the sale of Utilipro Inc. and the start-up of Sequent Energy Management. Excluding special items, AGL’s reported core earnings for the year of $81.8 million ($1.50 per share), compared with $68.6 million ($1.24 per share) last year.

The company attributed the decline in its fiscal fourth-quarter results to the seasonal effect of the contributions of VNG, SouthStar and Sequent, as well as the previously announced SouthStar unbilled revenue issue. AGL said the decline in net income was a result of increased interest expense primarily due to the acquisition of VNG and a gain on the sale of propane and certain reorganization costs recognized in the prior year. Core earnings after special items only lessened the decline slightly. The company posted $4.8 million versus $14.9 million for fourth quarter 2000.

The company also noted that effective Oct. 1, it has changed its fiscal year end from Sept. 30 to Dec. 31. This change creates a stub period from Oct. 1 to Dec. 31 prior to beginning the company’s new fiscal year on Jan. 1, 2002.

AGL Resources said it expects to achieve results in the range of $1.60 to $1.70 per share for the 12 months ended Sept. 30, 2002. AGL Resources will update its estimate for the 2002 calendar year period in late January when earnings for the stub period are released.

On an earnings before income tax (EBIT) basis, AGL said its distribution operation segment, which is comprised of Atlanta Gas Light, Virginia Natural Gas and Chattanooga Gas, contributed $215.5 million in 2001, compared to $150.8 million in 2000. AGL Resources CFO Richard O’Brien said the favorable variance is primarily due to the acquisition of VNG, which contributed incremental EBIT of approximately $54 million.

O’Brien said Wholesale Services, driven primarily by Sequent Energy, contributed EBIT of $3.5 million, up from the $2 million the segment contributed last year. Sequent alone earned $6.1 million in EBIT, compared with $2 million last year. The executive said the total segment’s EBIT reflects a $2.6 million one-time write-down related to the termination of its LNG partnership during the year.

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