South Jersey Industries Inc. Earnings Improve As Its Strategy Pays Off

Our second-quarter performance reflects our continuing focus on driving growth through our core business lines. Strong year-over-year growth in our utility and in our wholesale business provides the foundation for near- and longer-term performance. We also experienced marked improvement in our energy production business. After undergoing some significant changes in 2015, this area has rebounded well, delivering stronger operating performance in 2016 than in 2015, both for the second quarter and year to date.

The company's energy production business has been under pressure, in part because of a bad bet on Atlantic City. In last year's second quarter, the company recorded a $10.9 million writedown from an investment in the central energy facility for the now defunct Revel Casino property in Atlantic City. It was an investment the company made as part of a joint venture to take over construction and management of the facility's power plant project in 2011. However, that bet went south when Revel closed in 2014.

Looking forward

South Jersey's aim in the future is to avoid risky bets like Revel. Instead, it has a strategy to achieve "growth from high-quality, repeatable, low-risk earnings streams," according to Renna. So far that strategy is working, leading the company to reaffirm its economic earnings-per-share target of between $1.29 and $1.35 for 2016. Further, it continues to progress toward its long-term goal to deliver $150 million of annual economic earnings by 2020.