News Column

Annual earnings report a mixed bag for Vectren

February 20, 2014

By Susan Orr, Evansville Courier & Press, Ind.

Feb. 20--EVANSVILLE -- Vectren's pipeline construction and repair business continued to boom in 2013, according to the Evansville-based utility's 2013 earnings report.

Vectren offers infrastructure services -- building and repairing underground pipes -- through its subsidiaries Miller Pipeline and Minnesota Limited.

In its financial report, released Wednesday afternoon, Vectren said it earned $49 million from infrastructure services in 2013, as compared to $40.5 million the previous year.

Business in this sector is strong, Vectren said, for two main reasons. The shale gas and oil boom is creating strong demand for new pipelines, while at the same time much of the nation's aging pipeline infrastructure is in need of replacement.

But other parts of Vectren's nonutility division did not perform as well.

In its coal mining division Vectren saw an annual loss of $16 million, as compared to a $3.5 million loss in 2012.

Vectren said its losses in this area grew mostly because of "unfavorable mining conditions" at its Prosperity mine in Pike County, Ind. At that mine, workers encountered a thin coal seam and had to revise their mining plans, which increased the mine's production costs. Customer pricing on coal contracts also contributed to the annual loss, the company said.

Jerry Benkert, Vectren's chief operating officer, said the company expects its coal business will do "much better" in 2014 because of improved sales and production.

For the company as a whole, Vectren reported net annual income of $174.1 million ($2.12 per share), excluding results from a natural gas marketing company that Vectren exited last summer.

Vectren said excluding the results from that company, called ProLiance, gives a better picture of Vectren's 2013 performance because it has exited that business. If ProLiance's 2013 performance are included, Vectren's annual 2013 earnings are $136.6 million ($1.66 per share).

In comparison, Vectren earned $159 million ($1.94 per share) in 2012.

Through its utility group, Vectren serves electric customers in Southwestern Indiana and natural gas customers in Indiana and Ohio.

Vectren's utility group posted annual earnings of $141.8 million, as compared to $138 million in 2012.

Looking ahead, the company said it expects full-year 2014 earnings in the range of $2.15 to $2.35 per share.


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Source: Evansville Courier & Press (IN)

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