Warmer-than-normal weather caused Columbia Energy Group toreport first-quarter 1998 net income down from the same period lastyear. Results in the company’s marketing business were off sharplydue mainly to expenses.
The company had net income of $147.5 million, or earnings of$2.66 per share, compared to $162.7 million, or $2.94, during thesame period last year. The $15.2 million decrease ($0.28 per share)was attributable mainly to the 21% weather experienced inColumbia’s service area. This was the second-warmest first quarteron record for Columbia.
“Columbia’s total results were solid this quarter in spite ofthe warmer weather,” said Oliver G. Richard III, CEO. “Columbia’soperating income was strong, and we made major progress in addingvaluable new skills and infrastructure at our energy marketingcompany.”
The first-quarter weather, when compared to normal, reducedearnings by $30.3 million, or $0.55 per share. Compared to lastyear, which was also warmer-than-normal, the reduction was $16.2million, or $0.30 per share.
During the first quarter, Richard said, Columbia advanced itsretail unbundling and marketing strategies. “We asked the PublicUtilities Commission of Ohio to give Columbia Gas of Ohio’s 1.3million customers the freedom to choose their gas suppliers so theymight take advantage of new value opportunities,” he said. “Ourmarketing company, Columbia Energy Services, has taken the ColumbiaEnergy brand beyond Columbia’s traditional service area, withpromising early results. We have tripled retail accounts since ayear ago.”
“This quarter’s results demonstrate that our diversified growth,cost- saving efforts and progressive regulatory approaches arepaying off,” Richard added. “Our transmission and storage segment’simproved performance resulted in operating income increasing nearly29 percent over last year. Our exploration and production segment’simproved first-quarter results reflect strategic price hedgingpositions taken last fall and the results of our acquisition ofAlamco last summer,” Richard said.
The marketing, propane and power generation segment reportedoperating income of only $100,000 this quarter, compared to $9.9million in the first quarter of 1997. Costs associated withbuilding Columbia Energy’s gas marketing infrastructure and growingthe marketing businesses were the main reason for the decline.Sales in the first quarter of 1998 were up more than 240% to 364.2Bcf, an increase of 257.5 Bcf, leading to gross margins of $11.3million, an increase of $6 million over the same period last year.
Columbia’s transmission and storage segment reported operatingincome of $119.7 million, up $26.8 million over the same periodlast year. The sale of some gas from underground storage, which wasprovided for under Columbia Transmission’s 1997 regulatorysettlement, improved results by $13.4 million. Columbia’sdistribution segment reported a first-quarter operating incomedecline of $20.5 million, to $120.1 million, primarily reflectingthe impact of warmer weather.
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