Coming off of a tough week because of an announcement of lower earnings guidance, Bedminster, NJ-based NUI Corp. Thursday reaffirmed the positive performance of its energy trading and portfolio management business and declared its regular quarterly dividend on Thursday. The company said that while trading will be limited going forward because of its strict credit requirements on counterparties and declining liquidity in certain markets, the trading division is still expected to post relatively strong earnings.

“NUI’s trading and portfolio management subsidiary has been profitable every year since its inception in 1995, including fiscal 2002,” stated John Kean, Jr., NUI CEO. “NUI Energy Brokers has been the second largest contributor to earnings for NUI for the past several years and should account for more than 25% of NUI’s earnings before interest and taxes in fiscal 2002.” The company predicted last week that while the segment is expected to continue to be a significant contributor to fiscal 2003 earnings, earnings are likely to be flat, or slightly lower, when compared to fiscal 2002.

Sparked by the company’s earnings guidance reduction last week, Moody’s Investor’s Service on Monday placed the debt ratings of NUI Utilities Inc. and that of its parent holding company, NUI Corp., under review for possible downgrade (see Daily GPI, Oct. 22). The review affects $260 million and $60 million of NUI Utilities’ and NUI Corp.’s debt securities, respectively.

NUI reduced its earnings outlook for the second time in the last four months. The company said it anticipates fiscal 2002 earnings from continuing operations for the year that ended Sept. 30 to be between $0.85 to $0.95 per share, excluding the effect of the change in accounting, severance and discontinued items. In July, the company lowered its guidance to $1.50 to $1.60 per share from its previous guidance of $1.80 – $1.90 per share (see Daily GPI, July 17; Oct. 21).

“Despite all the issues facing the energy trading markets over the past year, NUI Energy Brokers has not experienced any write-offs and has not incurred any bad debt expense associated with its trading activities,” Kean added. “NUI Energy Brokers was successful in generating close to the same amount of earnings in fiscal 2002 as it did in fiscal 2001, which was a record year.”

The company also reported that the board of directors declared a regular quarterly dividend of $0.245 per share on the NUI’s common stock. The dividend is payable on Dec. 16 to shareholders of record on Dec. 2. “For more than 100 years, our dividend has played an important part in the value received by our shareholders. As previously stated, our board of directors is committed to the current dividend based on their positive view of the company’s future,” said Kean.

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