Unitil Corp. updated investors during its third-quarter earnings call on a recent acquisition with Maine Natural Gas Corp. and discussed details of a third acquisition the company hopes to finalize soon.
The company closed the Maine Natural Gas acquisition Oct. 31 and recently completed a $72 million equity offering that "strengthened our balance sheet and improved our credit metrics," Thomas Meissner, Unitil CEO and chairman, said during the Nov. 4 earnings call.
Unitil is working to integrate Maine Natural Gas and has completed its integration of Bangor Natural Gas Co., which was acquired in a transaction that closed Jan. 31.
Unitil expects to file its first distribution rate case for Bangor Natural Gas in early 2027, Meissner said in the call. He also said there will likely be a base rate case for Maine Natural Gas sometime in mid-2027.
Executives are now progressing on the third acquisition of the year: Aquarion Water Co. Inc. The CEO said the New Hampshire Public Utilities Commission approved the acquisition on Oct. 7. The company forecasts approvals in Connecticut, Maine and Massachusetts in the fourth quarter.
"With their geographic fit, potential for synergies and strong growth profiles, these companies are ideal additions to our utility operations," Meissner said.
The three acquisitions are expected to expand rate base growth to 10% annually through 2029 and support earnings growth in the upper half of the guidance range.
Investments in electric operations
Unitil is also implementing a solar utility project and advanced metering infrastructure. A Kingston, New Hampshire, solar project is now fully operational and is producing energy in line with or above the company's expectations, according to the CEO.
"This is a first of its kind project in the state of New Hampshire and is capable of powering roughly 2,000 homes, reducing the amount of energy we would otherwise import from the regional grid," Meissner said.
Unitil is seeking cost recovery of the solar investment through its New Hampshire rate case.
The advanced metering upgrade is progressing as planned, according to executives, with the replacements in Massachusetts on track to be completed by the end of the year. The company plans to begin the transition in New Hampshire at the start of 2026. These upgrades will require nearly $40 million of capital investment, some of which in Massachusetts could be eligible for accelerated cost recovery.
Sustainability goals
The multi-utility company based in New England said it remains on course to reduce company-wide direct greenhouse gas emissions 50% by 2030 and to be net-zero by 2050.
"This pledge underscores our continued commitment to environmental stewardship, sustainability and corporate responsibility," Meissner said.
Unitil has been working on an initiative to use telematics — long-distance data transmission — to analyze performance data and fuel consumption to optimize fleet performance.
Financial results
On Nov. 4, Unitil reported third-quarter adjusted net income of $400,000, or 3 cents per share. The adjusted net income is unchanged compared to the same period in 2024, but EPS increased 1 cent per share from the year-ago quarter. The S&P Capital IQ consensus estimate for the third quarter was negative 3 cents per share.
Until reaffirmed its 2025 earnings guidance range of $3.01 to $3.17, with a long-term EPS growth rate of 5% to 7%.
The electric adjusted gross margin for the nine months that ended Sept. 30 was $86.4 million, an increase of 5.8% compared to the same period in 2024. The gas adjusted gross margin was $134.7 million over that same nine months, an increase of 16.5%. Daniel Hurstak, Unitil's CFO, primarily attributed the bigger margins to higher distribution rates, customer growth and colder winter weather in 2025. The gas customer growth follows the trend from the company's second-quarter earnings of a more favorable outlook for the gas sector in New England.
The company's operation and maintenance expenses also expanded, largely due to the operating and transaction expenses of the Bangor Natural Gas acquisition.
