MGE Energy (MGEE) Q2 2024 earnings summary

Executive summary

• Serves ~163,000 electric and ~176,000 gas customers, with 87% of electric and 90% of gas customers being residential.

• Reported Q2 2024 GAAP earnings of $23.8 million ($0.66 per share), down from $28.7 million ($0.79 per share) year-over-year, with lower earnings attributed to higher fuel costs and reduced electric and gas sales due to weather.

• Maintains a strong balance sheet, conservative financial policies, and premium credit ratings (S&P AA-, Moody's Aa2).

• Focused on sustainability, targeting net-zero carbon electricity by 2050 and net-zero methane emissions from gas distribution by 2035.

• Service territory in Madison, WI, is economically resilient, with above-average growth and low unemployment.

Financial highlights

• Q2 2024 operating revenues were $145.7M, down from $148.0M in Q2 2023; six-month revenues were $337.0M, down from $365.3M year-over-year.

• Q2 2024 net income was $23.8M, down from $28.7M; six-month net income was $57.6M, down from $59.8M.

• 5-year EPS CAGR of 6.0% and dividend CAGR of 4.8%.

• Q2 2024 EPS was $0.66 (basic and diluted), compared to $0.79 in Q2 2023; six-month EPS was $1.59, compared to $1.65.

• 48 consecutive years of dividend increases, with Q2 2024 dividends per share at $0.428, up from $0.408 in Q2 2023.

Outlook and guidance

• Forecasted capital investment of ~$1.2B from 2024–2028, focused on renewables, grid modernization, and reliability.

• Plans to eliminate coal as an energy source by 2032 and achieve ≥80% carbon reduction from 2005 levels by 2030.

• MGE expects adequate liquidity for the next 12 months, supported by cash, operating flows, credit facilities, and planned equity and debt issuances.

• MGE is monitoring solar procurement disruptions and expects to request recovery of any cost increases in future rate proceedings.

• Transmission investment opportunities through ATC, with $5B in projected ATC capital expenditures from 2024–2028.