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WGL Holdings' Retail Energy Marketing Segment Reports Lower Unit Margins In Electricity

Customer Count Relatively Flat

November 21, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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For the fiscal year ending September 30, 2018, WGL Holdings' Retail Energy Marketing Segment reported Adjusted EBIT of $37.3 million, versus $41.6 million a year ago

The Adjusted EBIT does not reflect the impact of unrealized mark-to-market valuations on energy-related derivatives

On a non-adjusted EBIT basis, for the fiscal year ending September 30, 2018, WGL Holdings' Retail Energy Marketing Segment reported EBIT of $31.5 million, versus $53.2 million a year ago

"The decrease in EBIT reflects unrealized commodity margin losses in the current year compared to gains in the prior year and lower realized electric margins due to lower average unit margins and lower sales volumes this fiscal year compared to the prior fiscal year. Partially offsetting the decrease was higher realized gas margins due to increased portfolio optimization," WGL Holdings said in the 10-K

Operating expenses were higher due to increased corporate overhead allocation and customer marketing expenses.

Further summarizing the Retail Energy Marketing Segment's results, WGL Holdings said in the 10-K that, "During fiscal year 2018 compared to the previous year, this segment had reduced earnings as a result of: (i) unrealized commodity margin losses in the current year compared to gains in the prior year, (ii) lower realized electric margins due to lower average unit margins and lower sales volumes, and (iii) higher operating expenses due to increased corporate overhead allocations and customer marketing expenses. Partially offsetting the reduced earnings was higher realized gas margins due to increased portfolio optimization."

Total gross margin for the Retail Energy Marketing Segment for fiscal 2018 was $93.4 million, versus $106.8 million a year ago

Realized electricity margin for the Retail Energy Marketing Segment for fiscal 2018 was $37.8 million, versus $54.0 million a year ago

Realized natural gas margin for the Retail Energy Marketing Segment for fiscal 2018 was $58.1 million, versus $41.2 million a year ago

Operating revenues for the Retail Energy Marketing Segment were $1.0 billion for the fiscal year 2018, versus $1.1 billion a year ago.

At September 30, 2018, WGL Energy Services was serving approximately 210,600 customers, versus 213,900 customers as of June 30, 2018 and 229,900 customers a year ago

The net decline of 3,300 customers from June 30, 2018 to September 30, 2018 compares to a net decline of 4,800 customers from March 31, 2018 to June 30, 2018

WGL Energy Services customer count by commodity was as follows:

               9/30/18    6/30/18
Gas            108,900    110,600
Electricity    101,700    103,300

WGL Energy Services natural gas sales volumes for the fiscal year 2018 were 654.8 million therms, versus 693.3 million therms a year ago

WGL Energy Services electricity sales volumes for the fiscal year 2018 were 11,666.1 GWh, versus 12,248.4 GWh a year ago

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