Higher rates help Pennichuck turn profit as use is cut
MERRIMACK – Customers used less water in the third quarter of this year, but Pennichuck Corp. saw an increase in profits due to higher water rates.
Pennichuck made $1.4 million, or 32 cents per share, in the three-month period ending Sept. 30, compared to profits of $913,000, or 21 cents per share, in the same period last year.
The company spent $204,000 during the quarter on its eminent domain case with the city of Nashua, which will be argued before the New Hampshire Supreme Court this winter.
State regulators have agreed to let the city take the company’s largest subsidiary, Pennichuck Water Works, by eminent domain, but the water utility is appealing. The company is open to negotiating a stock sale of Pennichuck Corp., but the two parties cannot agree on price.
Pennichuck Corp. revenues for the third quarter were $9.5 million, up from $8.4 million in the same period last year. The company attributes the bulk of that increase to higher rates for customers of Pennichuck Water Works and Pittsfield Aqueduct.
Pennichuck Water Works is the water company that serves Nashua and several surrounding towns. Pennichuck Corp. also owns two smaller water utilities in New Hampshire, including Pittsfield Aqueduct, as well as a water utility management company and a real estate development firm.
The rate increase granted to Pennichuck Water Works in August brings in an additional $4.7 million per year for the company. State regulators approved the hike to help Pennichuck recoup the cost of upgrades to its water treatment plant.
Pennichuck Corp., attributes the third-quarter decline in water usage to the combined effects of the recession, customer conservation and abnormally cool and wet weather.
“Considering the uncooperative weather and the severe economic recession, we are pleased with the results for the quarter,” Pennichuck CEO Duane C. Montopoli said in a statement.
For the first nine months of 2009, Pennichuck Corp. profits were $2.1 million, or 48 cents per share, compared to profits of $4.2 million, or 98 cents per share, in the same period last year. Profits for 2008 were high due to the sale of three commercial buildings, which netted the company $2.3 million.
The company had 33,500 customers as of Sept. 30, an increase of 1 percent over the year.
Ashley Smith can be reached at 594-6446 or email@example.com.