MDU Resources Group Inc. reported 2015 consolidated adjusted earnings of $180.0 million, or 92 cents per share, compared to $205.5 million, or $1.07 per share in 2014. Consolidated adjusted earnings in the fourth quarter were $48.6 million, or 25 cents per share, compared to $67.8 million, or 35 cents per share in 2014.
The company’s construction materials business had record adjusted earnings.
“I am not satisfied with our overall earnings performance,” said David L. Goodin, president and CEO of MDU Resources Group. “However, we did have important successes such as record earnings at our construction materials business, good execution on a record capital budget at the utility and record throughput at our pipeline group.
“We also have nearly completed our strategic exit from the oil and gas exploration and production business,” he said. “This will allow us to focus on above-average regulated growth with our capital expenditure forecast and construction opportunities at a lower business risk profile.
“In addition, the geographic diversity of our businesses and their markets is a strength that helps spread the impact of various regional economic drivers,” Goodin concluded. “Our construction materials business, which operates in 19 states, increased earnings last year in all of its regions. Customer growth continued at our utility group, and was spread across all eight states in which they operate.”
The construction materials business had record adjusted earnings of $90.6 million, a 51 percent increase from 2014, on 8 percent growth in revenue. Generally Accepted Accounting Principles (GAAP) earnings were $89.1 million. Earnings were higher than 2014 in all regions. Volumes and margins were up across all product lines, with aggregate and ready-mix volumes up 4 percent and asphalt volumes up 11 percent.
This momentum is continuing into 2016 with a record year-end 2015 backlog of $491 million, an increase of 12 percent from $438 million at year-end 2014. The backlog does not include a $63.4 million contract awarded in January 2016 to reconstruct a portion of Interstate 29 in Sioux City, Iowa. This is the largest contract in Knife River’s history.
The construction services business reported adjusted earnings of $25.2 million, following two consecutive years of record earnings during which they completed several large, higher-margin projects. GAAP earnings were $23.8 million. Their 2015 focus on rebuilding work backlog was successful, ending the year at $493 million, an increase of 62 percent from $305 million at year-end 2014. This is the highest year-end level since 2008.
The utility business reported earnings of $59.5 million. Temperatures ranged from approximately 6 to 16 percent warmer than the previous year across the eight-state service territory, resulting in a $7.2 million earnings impact from lower natural gas retail sales and lower residential electric retail sales. That was partially offset by increased revenue from rate case proceedings that allowed recovery of investments made to serve the utility’s growing customer base, which increased by nearly 2 percent in 2015 to 1.05 million customers.