Home » Aqua Utilities » Aqua earnings grow for 10th straight year

From Philly.com (reported by Andrew Maykuth, Inquirer Staff Writer):

Household water consumption has declined steadily for two decades, thanks to smaller families, low-flow toilets, and more efficient appliances.

And then there was cool weather, which Aqua America Inc., the Bryn Mawr water purveyor, blamed for most of last year’s 4 percent to 5 percent drop in the volume of water sold.

“We’re waiting for this global warming to help our long-term sales,” chief executive officer Nicholas DeBenedictis quipped to analysts yesterday. “It hasn’t happened yet.”

But Aqua America, which serves three million people in 13 states, seems to be doing well without a heat wave. Despite the drop in volume sales, the company reported its 10th straight year of earnings growth.

The water-utility operator said annual net income in 2009 was up 6.6 percent to $104.4 million, or 77 cents a share, compared with 73 cents a share in 2008. The company reported revenue of $670.5 million, up 7 percent.

Aqua America’s secret to rising profit is to continually add customers, mostly through acquisitions, and a regular diet of rate increases.

During 2009, the company received rate boosts that will generate $37 million in additional revenue. The company also has more than $65 million worth of rate cases pending, including statewide cases in Pennsylvania and New Jersey, its two largest territories.

Regulators treat Aqua kindly, DeBenedictis said, because the company keeps operating costs low and can demonstrate the need for capital to improve treatment facilities and replace pipe. Regulators grant rates that include an average return on equity of more than 10 percent, he said.

The company spent a record $283.6 million on infrastructure improvements last year, and it has a capital budget of more than $300 million for 2010.

A return to normal weather this year – more lawns watered, more pools filled – also would not hurt.

“We hope the weather cooperates,” DeBenedictis said. “It’s hard to be worse than last year.”

An upside to the rainy, cool weather: “One hundred percent of our reservoirs are full,” he said. “We have plenty of water to sell.”

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