NUI Corp. reported higher earnings from continuing operations for both the most recent six month period and the most recent quarter (NUI’s second quarter in fiscal 2003), but the company announced its intention to exit the retail energy marketing business.

CEO John Kean Jr. said the results from NUI Energy, the retail marketing operation, have been volatile and do not “fit with our plan to reduce business risk and provide investors with more predictable earnings.” He said the exit from the business is consistent with the company’s commitment to shed under-performing businesses.

NUI Energy posted a loss from continuing operations of $3 million after tax, or $0.19 per share, during the second quarter of fiscal 2003 and a loss from continuing operations of $3.8 million, after tax, or $0.24 per share, for the first six months of fiscal 2003. NUI is currently in negotiations to transfer ownership of NUI Energy’s retail energy contracts. Transfer of the accounts is anticipated to be completed during the third quarter of fiscal 2003.

“During 2002, we took steps to reposition the company,” said Kean. “Reducing debt levels, identifying ways to strengthen our balance sheet and narrowing our focus have been key elements of our plan. Issuing equity and selling non-strategic assets were steps we completed during calendar 2002, which enabled us to reduce total debt by $108 million, or 19%. Continuing the sale of non-strategic assets, ensuring that our balance sheet remains strong and improving the financial performance of our remaining operations are key objectives for this year.”

The company reported earnings from continuing operations for the second quarter ended March 31 of $18.4 million, compared to $15.4 million for the same period last year. Earnings per share from continuing operations for the second quarter rose 6.5% to $1.15. The increase was a result of higher gas sales because of 35% colder temperatures during this year’s second quarter, higher rates due to the successful conclusion of a rate case at Elizabethtown Gas, increased trading margins and lower interest expense.

Partially offsetting those improvements were the operating losses at the company’s non-regulated retail energy marketing entity, higher operation and maintenance expenses and higher pension costs and auditing fees. Results for the second quarter of 2003 include an additional 1.9 million shares of common stock outstanding, compared to the second quarter last year.

Net income, including discontinued operations and the cumulative effect of a change in accounting, for the second quarter was $12.2 million, or $0.76 per share, compared to $13.8 million, or $0.97 per share, a year ago. Converting prior energy sales contracts and other energy trading contracts to accrual accounting as a result of Emerging Issues Task Force (EITF) 02-03 resulted in a one-time adjustment of $5.9 million, after tax, or $0.37 per share, to the company’s fiscal 2003 second quarter earnings.

Fiscal year-to-date, earnings from continuing operations were $26.0 million versus $23.4 million for the same period in fiscal 2002. Earnings per share from continuing operations for the six months ended March 31, 2003, were $1.62, compared to $1.66 a year ago. Net income, including discontinued operations and the cumulative effect of accounting changes, for the first six months of fiscal 2003 was $19.3 million, or $1.20 per share, compared to $4.4 million, or $0.32 per share, for the same period last year.

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