Southern Union Co. announces fiscal year 1996 first quarter results

Business Wire, Oct 26, 1995

AUSTIN, Texas--(BUSINESS WIRE)--Oct. 26, 1995--Southern Union Co. (NYSE:SUG) reported today a net loss of $5,598,000 (49 cents per average common share) for the three-month period ended Sept. 30, 1995 compared with a net loss of $6,168,000 (54 cents per average common share) for the like period in 1994.

Because of the seasonal nature of the gas utility business, this quarter is customarily a loss quarter for the company.

The company's 1996 first quarter results improved over last year primarily due to an increase in operating margin (operating revenues less gas purchase costs) which increased five percent to $42,121,000 for the three-month period ended Sept. 30, 1995, compared with $40,289,000 in 1994. The increase in operating margin is due to increased gas sales volumes as a result of growth in pipeline and marketing sales, increases in the residential customer base and also colder weather experienced in the final days of this quarterly period.

Operating revenues for the three-month period ended Sept. 30, 1995 were $69,950,000, compared with $69,114,000 in 1994. (The company's fiscal year-end is June 30.)

Net earnings for the twelve-month period ended Sept. 30, 1995 increased 380 percent to $16,639,000 ($1.45 per average common share) compared with net earnings of $3,464,000 (32 cents per common share) for the like period in 1994. The increased earnings for the twelve-month period ended Sept. 30, 1995 are primarily attributable to the Jan. 31, 1994 acquisition of Missouri Gas Energy (MGE), which added approximately 478,000 customers to the company's gas distribution system.

As a result, MGE's operations for the period October 1993 to January 1994 are not reflected in Southern Union Co.'s consolidated net earnings for the twelve-month period ended Sept. 30, 1994. MGE's rate structure collects a greater percentage of its margin during the winter heating season months. Southern Union Co.'s consolidated operating revenues and operating margin also improved 17 percent and 29 percent, respectively, for the twelve-month period ended Sept. 30, 1995 as compared with 1994.

Operating revenues for the twelve-month period ended Sept. 30, 1995 were $480,882,000 compared with $411,213,000 in 1994 and operating margin was $240,039,000 in 1995 compared with $185,599,000 in 1994.

On Oct. 20, 1995, Southern Union Co. announced the sale of several minor gas pipeline and utility systems located in the Texas and Oklahoma Panhandles including Western Gas Interstate Co., an interstate pipeline subsidiary which currently transports gas to the company's utility systems in this area. The utility systems involved serve approximately 7,700 customers. These transactions are pending approval by various regulatory agencies and are expected to close in the spring of 1996.

Southern Union Co. will hold its Annual Meeting of Stockholders at 2 p.m., Central Standard Time, on Nov. 7, 1995 at its offices at 504 Lavaca Street, Austin. Among other things, it is anticipated that the company will announce a five percent common stock dividend on that date.

Southern Union is a gas distribution company, serving approximately 976,000 customers through two divisions, Southern Union Gas and Missouri Gas Energy. Southern Union Gas serves approximately 498,000 customers in Texas (including the cities of Austin, Brownsville, El Paso, Galveston and Port Arthur) and Oklahoma. Missouri Gas Energy serves approximately 478,000 customers in western Missouri, including the cities of Kansas City, St. Joseph, Joplin and Monett. -0-

    Following are unaudited comparative, summarized financial results
of Southern Union Co.  and subsidiaries for the three- and
twelve-month periods ended Sept.  30, 1995 and 1994 (thousands of
dollars except shares and per share amounts):