Aqua America Reports 20% Net Income Increase
Aqua America, Inc. on Nov. 5 reported net income for the quarter ended Sept. 30, 2008 of $35.4 million compared to $29.5 million in the third quarter of 2007, an increase of 20 percent.
Corresponding diluted earnings per share for the quarter were $0.26, compared to $0.22 in the same quarter of 2007 on 1 percent more shares outstanding. Revenue for the quarter was $177.1 million compared to $165.5 million in the same period of 2007, an increase of 7 percent.
Aqua America Chair and Chief Executive Officer Nicholas DeBenedictis said, "This quarter's financial performance is a reflection of the great deal of time and effort that management has spent focused on investing in water quality infrastructure and key rate case awards over the past year. I am pleased that our hard work and dedication to alleviating prior regulatory lag is starting to show in our financial results. The majority of this quarter's revenue growth was due to rate awards granted for previous capital investments and for increased operating expenses, therefore, directly impacting net income. Management expects to see the positive impact on revenue of our rate relief effort continue into 2009."
Investment recovery through rate relief continues to be a major focus of management for 2008 under the company's program to address the previous lack of timely returns on invested capital (regulatory lag), which has affected previous financial results. To date in 2008, the company has received rate awards that are designed to provide $60 million in additional annualized revenue, the majority of which was awarded in recent Pennsylvania and New Jersey rate cases that granted the company nearly $39 million in annualized rate awards beginning in the third quarter.
The company expects to file rate requests seeking more then $70 million in 2009, including cases in Pennsylvania, New Jersey, New York, and Ohio. The timing and extent to which rate increases might be granted by the applicable regulatory agencies will vary by state.
"Looking at the filings that we are projecting in 2009, we anticipate revenue growth through 2010 as we continue investing in necessary capital projects to improve service and reliability for our customers," said DeBenedictis.
Through the third quarter, the company has invested $188 million in infrastructure improvements. DeBenedictis said, "The majority of the company's capital investment program is now focused on discretionary capital, which includes upgrades to our distribution network including pipe replacement projects and plant upgrades to enhance reliability and service to our customers."
Even in the current economic climate, Aqua America continues to expand its operations and has announced seven acquisitions thus far in 2008, which provide water or wastewater service to a total of approximately 22,000 people. These acquisitions, including the recently completed purchases of the New Daleville wastewater system and Honesdale Consolidated Water Company in Pennsylvania, and the Saddle Club water system in Texas, show the company's continued commitment to its growth-through-acquisition model.
Aqua America, Inc. is a publicly traded water and wastewater utility holding company with operating subsidiaries serving approximately three million people in Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, New York, Indiana, Florida, Virginia, Maine, Missouri, and South Carolina.