MDU Resources Group Inc. reported second quarter earnings from continuing operations of $46.1 million, compared to earnings from continuing operations of $25.8 million for the second quarter of 2015. Including discontinued operations, the exploration and production, and refining businesses, the company reported a loss of $109.3 million for second quarter 2016, compared to a loss of $229.8 million for second quarter 2015.
For the six months ended June 30, MDU Resources reported earnings from continuing operations of $77.9 million compared to $46.3 million for the first six months of 2015. Including discontinued operations, the company had a loss of $84.6 million for the six months ended June 30, compared to a loss of $535.9 million in 2015.
“This was a significant quarter strategically for our company, as we completed our exit from the exploration and production business and sold our interest in the refining business,” said David L. Goodin, president and CEO of MDU Resources. “Going forward, we are a more streamlined company with a lower risk profile and less exposure to commodity prices. We are focused on growing our two primary business lines: construction materials and services and regulated energy delivery.
“Our construction materials business had an outstanding quarter, achieving record second quarter earnings while adding projects to backlog. Our construction services operations continue to build momentum and also added projects to backlog,” Goodin said. “Higher utilization of natural gas storage helped increase our earnings at the pipeline business. Earnings also were up 36 percent at our electric utility, but warmer weather led to a larger seasonal loss at our natural gas utilities despite regulatory rate relief in some areas.”
The company’s construction materials business reported record second quarter earnings of $33.7 million, up 67 percent from a year ago, with higher earnings across all regions. Earnings growth was driven by margins that continue to trend higher and by a 9 percent increase in revenue. Construction revenues increased and sales volumes were higher on aggregates, asphalt and ready-mix. Major jobs that have been awarded to this business in 2016 include a $63.4 million Interstate 29 project in Iowa, a $30.5 million bypass in Oregon and a $25.0 million Interstate 35 project in Minnesota.
The construction services business completed the quarter with earnings of $7.0 million, on pace with second quarter 2015. Stronger inside electrical and industrial results were offset by lower margins from outside work and equipment sales and rentals. Backlog at end of second quarter was $508 million, up 18 percent. This segment has diverse construction capabilities. Current projects include a utility-scale solar farm, a government research facility, a 345-kilovolt transmission project, a corporate campus expansion, utility maintenance contracts and mission critical projects.
Combined construction materials and services backlog was $1.3 billion at June 30, up 4 percent from a year ago. These businesses are focused on adding strong-margin contracts to backlog while executing on existing projects.