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ONE Gas Unveils Financial Projections for 2025

ONE Gas, Inc. (NYSE: OGS) recently released its financial guidance for 2025, unveiling ambitious plans aimed at fostering sustainable growth and enhancing customer service. The company remains committed to delivering long-term value for its stakeholders while addressing increasing customer demand. Robert S. McAnnally, president and CEO of ONE Gas, emphasized this commitment by stating, "We enter 2025 focused on creating long-term value for our stakeholders, supporting growing customer demand, and enhancing safety and reliability."

Financial Expectations for 2025

For the upcoming year, the company anticipates a net income ranging between $254 million and $261 million. This translates to earnings per diluted share estimated at approximately $4.20 to $4.32, with a midpoint projection of $257 million in net income and $4.26 in diluted earnings per share. This forecast accounts for the expected benefits from newly implemented rates and anticipated customer growth, while also considering rising operating expenses and investments in capital assets.

ONE Gas is set to invest about $750 million in capital projects for strategic purposes, with a focused intention on system integrity and necessary replacements. Additionally, the company intends to allocate around $180 million specifically to extend services to new customers, responsive to growth opportunities predominantly in Texas and Oklahoma. The anticipated average rate base for 2025 is estimated at $5.8 billion.

A significant aspect of ONE Gas’s financial strategy includes outstanding forward sale agreements for approximately 3.6 million shares of its common stock, aimed at bolstering financial stability. If these forward sales were to be settled at the end of the third quarter, the company would see net proceeds close to $275 million.

Long-term Growth Prospects

Looking beyond 2025, ONE Gas has provided insight into its projected capital investments through to 2029. The company anticipates ongoing capital expenditures in the range of $750 million to $850 million annually, totaling approximately $4.0 billion over the five-year span, factoring in a growth capital outlay of around $1.0 billion. With these investments, the company aims to achieve a rate base growth of 7% to 9% each year until 2029.

Additionally, the firm projects annual increases in net income and diluted earnings per share of 7% to 9% and 4% to 6%, respectively, with expectations to remain at the higher end of these ranges through 2029. Operating costs are also expected to grow but at a declining rate of about 4% per year over the five-year period.

Financial Strategy and Management

ONE Gas estimates a total financing need of about $1.5 billion from 2025 to 2029, aiming for approximately 40% of this to be covered by equity. The company has reiterated its commitment to maintaining a consistent dividend growth rate, targeting an annual increase of 1% to 2%, contingent upon board approval, with a dividend payout ratio set at 55% to 65% of net income.

Upcoming Conference Call

To provide further insights into these projections, the ONE Gas management team is set to host a conference call on December 5, 2024. Stakeholders and interested parties can join the call at 8 a.m. EST (7 a.m. CST) and participate via telephone or through the ONE Gas website. For those unable to attend live, a recording will also be made accessible for replays.

ONE Gas remains resolute in navigating the future with a balanced approach towards growth and customer service. As it heads into 2025, the company aims to leverage strategic investments while enhancing operational safety and maintaining a focus on financial performance, ensuring a viable energy future for its customers across Kansas, Oklahoma, and Texas.

For more detailed information on ONE Gas's financial guidance and strategies, stakeholders are encouraged to visit their official website and engage with their news channels.