California Water Service Group Delivers Strong Q4 2024 Results Amidst Challenging Circumstances
California Water Service Group, a leading provider of water and wastewater services in California, has reported strong financial results for its fourth quarter (Q4) 2024, despite facing challenging circumstances throughout the year. In a conference call on February 27, 2025, the company's CEO, Marty Kropelnicki, and CFO, Jim Lynch, shared the details of the company's Q4 performance.
"What a difference a year makes," said Kropelnicki, highlighting the significant progress made by the company in 2024. "We started 2024 with delayed General Rate Case for California and that was financially very challenging for the company. And now we end the year in excellent financial position, setting new highs on certain critical business elements."
The company's Q4 revenue increased 3.6% to $222.2 million compared to the prior year Q4 operating revenue of $214.5 million. Net income for the quarter was $19.7 million or $0.33 per diluted share, down from $30.1 million or $0.52 per diluted share in Q4 2023.
According to Lynch, the increase in Q4 2024 revenue was driven primarily by $24.2 million or $0.45 diluted earnings per share increase in rates billed to customers as authorized in the company's regulatory filings and an increase of $5.5 million or $0.10 per diluted share in the Monterey Water Rate Adjustment Mechanism (MWRAM), due to lower high-tier water sales.
However, this was partially offset by lower unbilled revenue totaling $8.1 million or $0.15 per diluted share due to lower December water usage and $19.4 million or $0.36 per share related to previously deferred WRAM balances recognized in Q4 2023 that did not recur in 2024.
Operating expenses were up by $10.6 million to $189.9 million, with water production costs increasing by $3.4 million or $0.06 per diluted share to $73.7 million primarily due to an increase in wholesale rates and higher consumption.
Kropelnicki emphasized the company's commitment to sustainability, resiliency planning, and emergency preparedness and response planning, which has positioned it well for continued success in 2025 and beyond.
The company's strong financial performance in Q4 2024 is a testament to its ability to navigate challenging circumstances and deliver results. As Kropelnicki said, "Cal Water accomplished allot [sic] in 2024 under difficult circumstances. But by the end of the year, it has positioned us very, very well for continued success in 2025 and beyond."
