IDT Energy Continues Net Customer Growth

IDT Energy recorded another quarter of net customer growth for the quarter ending October 31, 2011 (first fiscal quarter of 2012), with a net gain of 23,000 meters, its parent disclosed in reporting earnings today.

IDT Energy meters were 428,000 as of October 31, 2011, versus 405,000 as of July 31, 2011 and 365,000 a year ago

The net growth of 23,000 meters during the three months ended October 31, 2011 compares to net growth of 27,000 meters during the three months ended July 31, 2011.

Electric meters as of October 31, 2011 were 245,000, compared to 232,000 as of July 31, 2011 and 207,000 as of October 31, 2010.

Gas meters as of October 31, 2011 were 183,000, compared to 173,000 as of July 31, 2011 and 158,000 as of October 31, 2010.

In terms of Residential Customer Equivalents, IDT Energy reported 245,000 RCEs as of October 31, 2011, versus 236,000 as of July 31, 2011 and 209,000 a year ago.

Although it was offset by gross additions, average monthly churn increased to 6.1% during the quarter (versus 5.2% in the quarter ending July 31, 2011), in part due to the impact of the recent acceleration in customer acquisitions as new customers tend to have higher initial churn rates.

IDT Energy confirmed its market shares, in terms of migrated customers, during an earnings call. IDT Energy has maintained its previously reported market share of about 20% of migrated customers in New York, and said that its market share of migrated accounts in New Jersey is about 10%, and its market share of migrated accounts in Pennsylvania is about 2%.

For the quarter ending October 31, 2011, IDT Energy reported income from operations of $8.0 million, versus $8.8 million a year ago.

Gross profit at IDT Energy was higher at $16.8 million for the quarter, up from $14.7 million a year ago.

IDT Energy said that the gain reflected improving electric margins, which increased to 39.7% from 35.3% in the year-ago quarter as cost per kWh declined more rapidly than per unit revenue. Gross margin on gas sales was 19.6%, a 680 basis point decline year over year as the increase in the cost per therm of natural gas outpaced a slight increase in revenue per them.

IDT Energy's SG&A expense for the quarter was $8.8 million, up from $5.9 million a year ago, reflecting increased investment in new customer acquisitions focused in recently added utility territories within IDT Energy's expanding footprint.

Quarterly revenue was $45.8 million, versus $43.4 million a year ago. Electric revenues for the quarter were $38.9 million, versus $36.6 million a year ago. Gas revenues were $6.9 million, versus $6.8 million a year ago.

IDT Energy reported that as of October 31, 2011, the date on which MF Global filed for bankruptcy protection, IDT Energy held $1.65 million of cash on deposit with MF Global in support of hedging positions related to IDT Energy's commodity supply. Subsequently, the MF Global exposure was reduced by $0.7 million through the transfer of positions and associated margin to an alternative clearing agent. Of the remaining exposure, approximately 50% was reserved in the quarter. The reserve is based on management's best estimate of the net recoverable amount from MF Global.