UGI Corporation (NYSE:UGI) Q2 2018 Earnings Conference Call Transcript

May 03, 2018 • 09:00 am ET

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UGI Corporation (NYSE:UGI) Q2 2018 Earnings Conference Call Transcript

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Q & A
Operator
Operator

Great. Thank you. (Operator Instructions) And your first question comes from Mirek Zak with Citigroup. Please go ahead, your line is open.

Analyst
Mirek Zak

Hi, good morning, everyone.

Executive
John L. Walsh

Good morning.

Analyst
Mirek Zak

So, I understand the relationship between our weather and volumes isn't necessarily linear, but it seems volumes didn't quite respond to the more normal winter weather than some might have expected. So I was just wondering if you can speak to -- if you saw any other dynamics playing out during the quarter maybe increased price in competition with (inaudible) our large players or any sort of increased level of customer attrition during the quarter?

Executive
John L. Walsh

No. no. So it's been a pretty good year for us in terms of customer retention, number one. We did have moments of some shortage in parts of the country during parts of January where we did do some short filling where we just don't have enough propane to fill the tanks, but that was really minor. I think the headline for the quarter really it was February being 10% warmer than normal. It really cause your water pool to slow down quickly and then of course you responded around mid-March, got very strong again. So, just as you saw the cold in late December helped January, the warm in February effected the early part of March. But the cold March certainly gave us a great lead in April, so April's been an outstanding month for us as well.

Executive
Kirk R. Oliver

And I just comment more broadly because we look at both AmeriGas and UGI International. The patterns with regard to weather and the response of volumes to weather patterns are very similar in the US and Europe. So when we compare kind of that weather and volume pattern in AmeriGas to say that same pattern France where we have a large business very, very similar, you get that lack back depending on sort of timing of weather and volumes follow but with the lag.

Analyst
Mirek Zak

Okay. So considering the weather, you wouldn't necessarily consider this a sort of a more normalized situation going forward?

Executive
John L. Walsh

It's normal across a period of time, but you also remember Q1 excluding the last week of December was 7% warmer than normal. So we got off to a relatively warm start, had sudden and extreme cold, but really when we look at a normal year, we're looking at not having these peaks and troughs that have been so significant this year, so that -- that does affect things.

Analyst
Mirek Zak

Okay. Is there a way you can quantify sort of what you think that the delta was due to these peak and trough?

Executive
John L. Walsh

As far as volume?

Analyst
Mirek Zak

Yes.

Executive
John L. Walsh

Yes. So, I mean when you look at it across the entire year. And if you -- for instance this quarter, we're looking at weather that's 14% colder and volume up 10% and not all of our business is weather sensitive. So, you don't expect it to be one for one, we've got a lot of commercial business, restaurants