On August 5, 2024, Artesian Resources Corp (ARTNA, Financial) released its 8-K filing detailing the financial results for the second quarter and year-to-date 2024. Artesian Resources Corp operates as a holding company with a focus on water distribution and wastewater services, primarily in Delaware, Maryland, and Pennsylvania.
Second Quarter Financial Highlights
Artesian Resources Corp (ARTNA, Financial) reported a net income of $5.3 million for Q2 2024, marking a 19.9% increase from the same period in 2023. Diluted net income per share rose to $0.52, an 18.2% increase compared to $0.44 in Q2 2023. However, the company’s revenue for the quarter totaled $27.4 million, which is an 8.6% increase from Q2 2023 but fell short of the analyst estimate of $29.00 million.
Revenue and Operating Expenses
Water sales revenue increased by $1.9 million, or 9.0%, primarily due to a temporary rate increase implemented on November 28, 2023, and subsequently replaced by final approved rates effective June 12, 2024. Additionally, the number of customers served and overall water consumption increased due to warmer and drier weather in late June 2024.
Other utility operating revenue saw an 8.4% increase, driven by customer growth and the timing of industrial wastewater revenue.
Operating expenses, excluding depreciation and income taxes, rose by $0.6 million, or 4.3%, primarily due to increased costs associated with water supply and treatment, payroll, and administrative expenses. Depreciation and amortization expenses increased by $0.2 million, or 6.5%, reflecting continued investment in utility infrastructure.
Year-to-Date Financial Highlights
For the first six months of 2024, Artesian Resources Corp (ARTNA, Financial) reported a net income of $9.7 million, a 19.5% increase compared to the same period in 2023. Diluted net income per share was $0.95, up 13.1% from $0.84 in the first half of 2023. Revenues for the six months totaled $52.0 million, an 8.8% increase from the same period in 2023.
Water sales revenue for the year-to-date period increased by $3.7 million, or 9.5%, due to the temporary rate increase and higher water consumption. Other utility operating revenue increased by $0.5 million, or 7.8%, driven by customer growth and industrial wastewater revenue timing.
Capital Expenditures and Strategic Investments
Artesian Resources Corp (ARTNA, Financial) invested $18.4 million in water and wastewater infrastructure projects during the first six months of 2024. These investments include PFAS treatment equipment, facility relocations due to government mandates, infrastructure renewals, new main installations, transportation equipment purchases, meter reading equipment upgrades, and the construction of a new wastewater treatment plant.
“Artesian remains steadfast in our commitment to provide high-quality water service for our customers,” said Nicki Taylor, President of Artesian Water Company. “We continue to invest, as we have for over a decade, in PFAS treatment technology to remain ahead of new regulations while also strategically focusing on developing the most efficient and cost-effective sources of supply to meet current and future customer needs.”
Analysis and Conclusion
Artesian Resources Corp (ARTNA, Financial) demonstrated strong earnings growth in Q2 2024, with net income and EPS both showing significant increases. However, the company’s revenue fell short of analyst expectations, which may raise concerns among investors. The increase in operating expenses, particularly in water supply and treatment, payroll, and administrative costs, also warrants attention.
Despite these challenges, Artesian Resources Corp (ARTNA, Financial) continues to invest heavily in infrastructure, ensuring reliable service and compliance with regulatory standards. These strategic investments are crucial for long-term growth and sustainability in the regulated utilities sector.
For more detailed insights and analysis, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Artesian Resources Corp for further details.
