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Strategies & Market Trends : Value Investing

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To: bruwin who wrote (74600)	12/22/2023 6:43:50 PM
From: E_K_S	Read Replies (1) of 78476

Re: UGI The losses I believe are due to the volatility in their commodity prices for their LNG/Propane divisions which started to accrue when they acquired the AmeriGas division in 2021. Their net income was impacted by the volatility in these commodity prices. That transaction also involved taking on more debt in order to acquire the shares that they did not already own. Link to Annual Income Statement showing five years (click Next to get next five years and so on) Every Year for the last 15 years UGI has posted positive Net Income EXCEPT 09-2023 Link to Quarterly Income statement Looking at the Quarterly Income Statement; 12/2021, 6/2022, & 6/2023 show negative Net Income. Expenses increased these quarter I believe due to the change in commodity prices they incurred in their AmeriGas division. They look like seasonal periods and at/around the time they took over the AmeriGas operations under the UGI company. (prior to that they just owned the stock and did not manage the operations). Management's solution (October 2023), hire JPM & GS to review the companies operations including Foreign divisions as well as AmeriGas to see if they can make the company more profitable & stabilize EPS to be more predictable. In November they did sell one of their Foreign Divisions and used the proceeds to reduce debt. Management has yet to disclose if they have received the completed (and/or partial) reports on action to resolve these pending issues. My guess, is debt needs to be reduced more as Debt/Equity is still high (not really unusual for a utility company). The best way to reduce debt is to spin off (or sell) their AmeriGas division and off load some debt w/ that deal. The Investment bankers would want to do this to earn a large fee and I do believe there are other companies that want this asset but must be at the right price. ------------------------------------------------------- If you look at their income prior to 2021 (before the AmeriGas acquisition), they show positive FCF and stable net income. Some type of deal will get done w/ the AmeriGas division.

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