Warmer weather and a tough operating environment have weighed on the first quarter financial results of another major propane company.
Suburban Propane Partners, LP, has issued its results for the three months to December 31. Company spokesman Mike Dunn said many areas of the country had experienced record warm temperatures so far this heating season – in particular during the month of December. That had weighed on propane sales and the profits of propane companies.
“We fully expected this fiscal 2012 will continue to present a challenging operating environment for propane industry, with the continued weakness in the economy, limited new housing opportunities and stubbornly high commodity prices being the key drivers for our concerns. However, our fiscal 2012 first quarter results were most negatively effected by the unseasonably warm weather.”
The company reported net income of $24.3 million for the first quarter, compared to $44.7 million for the same period the year prior. Retail propane sales fell 12 million gallons, or 13.9 percent, to 74.3 million gallons from 86.3 million gallons in the prior year quarter. Sales of fuel oil and other refined fuels decreased 3.7 million gallons to 7.7 million gallons, compared to 11.4 million gallon in the prior year first quarter.
Dunn said the industry faced a “cyclonical downturn” from the global recession.
“The significantly warmer than normal temperatures for first quarter across much of the nation only exacerbate the impact of these factors on both volumes and margins. Nonetheless, it is an environment such as this that reaffirms the importance of the steps we have taken to invest in our people, our technology and to restructure our operating model, while at the same time, strengthening our balance sheet and our cash position.”
AmeriGas Propane Inc, general partner of AmeriGas Partners LP, reported net lower first quarter earning last month – recording income of $42.5 million compared with $74.9 million for the same period last year.
The company sold 220.9 million gallons of retail propane compared with 256.4 million gallons in the prior year period.
Company chief executive Eugene V. N. Bissell said the weather had played a big factor, with first quarter temperatures nearly 12 percent warmer than normal according to the National Oceanic and Atmospheric Administration.