Dover, Delaware — Chesapeake Utilities Corporation (NYSE: CPK) (“Chesapeake Utilities” or the “Company”) today announced financial results for the year and the fourth quarter ended December 31, 2019. Net income for 2019 was $65.2 million, or $3.96 per share compared to $56.6 million, or $3.45 per share for 2018. Fourth quarter 2019 net income was $22.6 million, or $1.37 per share compared to $17.8 million, or $1.08 per share in 2018.
In the fourth quarter of 2019, the Company completed the previously announced sales of the assets and contracts of its natural gas marketing subsidiary, Peninsula Energy Services Company, Inc. (PESCO) and recorded a pre-tax gain of $7.3 million ($5.4 million after tax). As a result, PESCO’s results for all periods presented have been separately reported as discontinued operations and its assets and liabilities have been reclassified as held for sale where applicable. There are no other items included in discontinued operations. Additional details on the transactions to sell PESCO’s assets and contracts are included on page 7 of this press release.
The Company’s net income from continuing operations for 2019 was $61.1 million, or $3.72 per share. This represents an increase of $4.3 million or $0.25 per share compared to 2018. Higher earnings for 2019 reflect increased gross margin from recently completed and ongoing pipeline expansion projects, incremental margin from the acquisition of certain assets of Marlin Gas Transport, Inc. (“Marlin Gas Transport”), R. F. Ohl Fuel Oil, Inc. (“Ohl”) and Boulden Inc. (“Boulden”), organic growth in the natural gas distribution operations and higher retail propane margins. A Florida Public Service Commission (“PSC”) regulatory order that enabled the Company to retain tax savings associated with lower federal tax rates resulting from the United States Tax Cuts and Jobs Act (“TCJA”) in several natural gas distribution operations and continued growth in gross margin from Aspire Energy of Ohio (“Aspire Energy”) also contributed to higher earnings growth in 2019. These increases were partially offset by higher operating expenses and interest expense to support the Company’s growth initiatives, a one-time pension settlement expense of $0.5 million associated with de-risking the Chesapeake Utilities Corporation Pension Plan (included with Other expense, net on the condensed consolidated statement of income) as well as $4.9 million in lower gross margin due to a decline in customer consumption as a result of warmer weather in 2019 compared to 2018.