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SOUTHEASTERN MICHIGAN GAS ENTERPRISES REPORTS SECOND-QUARTER EARNINGS

    PORT HURON, Mich., Aug. 5 /PRNewswire/ -- Ward N. Kirby, president and chief executive officer of Southeastern Michigan Gas Enterprises, Inc. (NASDAQ-NMS: SMGS), announced that the company experienced a second-quarter net loss for common shareholders of $165,000 ($.02 per share) compared to a net loss of $380,000 ($.04 per share) for the second quarter of 1992.  The net loss during the quarter is normal as the company's primary business of natural gas distribution is dependent upon the winter months for a large part of its annual operating revenues.
    For the six-month period ended June 30, 1993, net income available for common increased to $7,696,000 ($0.81 per share) compared to $6,348,000 ($.69 per share) for the same period in 1992.  Net income for the 12 months ended June 30, 1993, was $9,658,000 ($1.03 per share) compared to $8,951,000 ($0.98 per share) for the same period in 1992.
    The 1992 results reflect an extraordinary charge of $901,000, net of tax, ($0.10 per share) for the early extinguishment of the company's 11-1/2 percent series debentures, originally due 2000.
    Natural gas volumes sold increased 5 percent for the six-month period due to colder temperatures in the first quarter of this year compared to last year.  In addition, gas sales for the first six months of 1993 reflect an increase of over 5,000 customers from the 1992 level.
    For the six-month period ended June 30, 1993, compared to 1992, transportation revenues were unchanged, although volumes of gas transported decreased 21 percent.  The decrease in transportation volumes was primarily due to the loss of coal-displacement volumes realized in 1992.  Coal-displacement transportation volumes are sensitive to natural gas prices relative to coal and are at a lower transportation margin.
    Year-to-date 1993, gas marketing margins increased $386,000 over 1992 while volumes increased slightly.  The increase in margins is primarily due to revenues from providing marketing-related services to customers.  As the gas marketing industry has matured, marketers compete for customers not only on the basis of gas prices, but on the ability to provide services including natural gas storage, pipeline nominations and balancing.
    Earnings from SEMCO's operations and investments in gas transmission, gathering and storage decreased from 1992.  Overall, revenues generated by new investments were offset by continuing losses from the NOARK Pipeline System.
    NOARK, which was placed in service in September 1992, operated at approximately 60 percent of capacity during the six-month period ended June 30, 1993.  In addition, primarily due to competition in the area, NOARK continues to discount transportation rates from the maximum authorized by Arkansas regulators in order to attract additional volumes.
   An 8-mile pipeline between NOARK and a local gas distribution company in Missouri was placed in service July 1993.  NOARK expects to increase firm demand revenue and total throughput as a result of this interconnect being placed in service.
    Enterprises distributes and transports natural gas to approximately 210,000 customers in 23 counties in Michigan through its subsidiaries Southeastern Michigan Gas Company, Battle Creek Gas Company and Michigan Gas Company.  The company also has operations and investments in natural gas marketing, gas transmission and gathering and underground storage of natural gas.
              SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
    Quarter Ended June 30                         1993          1992
    Operating revenue                         $53,011,000   $47,041,000
    Net income (loss) for common                ($165,000)    ($380,000)
    Earnings per share(A)                           ($.02)        ($.04)
    Dividends per share(A)                            .19           .18
    Average common shares outstanding(A)        9,488,000     9,243,000
    Degree days - actual                              979         1,158
                - percent of normal (pct)           106.7         128.5
    Gas sales customers - average                 209,756       204,241
    Year-to-Date Ended June 30
    Operating revenue                        $152,166,000  $129,010,000
    Net income available for common
     before extraordinary item                 $7,696,000    $7,249,000
    Extraordinary item - loss on early
     extinguishment of debt, net of tax               ---     ($901,000)
    Net income available for common            $7,696,000    $6,348,000
    Earnings per share before
     extraordinary item(A)                           $.81          $.79
    Earnings per share(A)                            $.81          $.69
    Dividends per share(A)                           $.38          $.36
    Average common shares outstanding(A)        9,457,000     9,211,000
    Degree days - actual                            4,345         4,319
                - percent of normal (pct)           105.1         103.2
    Gas sales customers - average                 209,805       204,249
    12 Months Ended June 30
    Operating revenue                        $274,681,000  $234,048,000
    Net income available for common
     before extraordinary item                 $9,658,000    $9,852,000
    Extraordinary item - loss on early
     extinguishment of debt, net of tax               ---      (901,000)
    Net income available for common            $9,658,000    $8,951,000
    Earnings per share before
     extraordinary item(A)                          $1.03         $1.08
    Earnings per share(A)                           $1.03          $.98
    Dividends per share(A)                           $.76          $.72
    Average common shares outstanding(A)        9,395,000     9,149,000
    Degree days - actual                            7,036         6,896
                - percent of normal (pct)           104.6         101.0
    Gas sales customers - average                 210,395       204,584
    (A) -- Adjusted to give retroactive effect to 5-percent stock dividends in May 1992 and May 1993.
    -0-             08/05/93
    CONTACT:  Allan E. Peattie, manager, Investor Relations, Southeastern Michigan Gas Enterprises, 313-987-2200
    (SMGS) CO:  SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC. IN:  OIL UTI SU:  ERN ST:  MI


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Date:Aug 5, 1993
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