Weather among factors impacting MDU’s 2020 first quarter

Knife River Corp.’s parent company, MDU Resources Group, reported first-quarter earnings of $25.1 million – a figure that is down about 38 percent from the company’s first-quarter 2019 earnings.

“While our operations continue to perform well as our country responds to the COVID-19 pandemic, earnings in the first quarter were adversely impacted by much lower investment returns, milder weather at our utility operations, and an adjustment on a construction contract,” says David Goodin, president and CEO of MDU Resources. “We are confident of our ability to continue to provide our customers with the essential services they need, however significant uncertainty exists about the economic impact that may be seen from COVID-19 and lower energy prices and demand.

“Our companies are essential service providers, and our work remains vital to building a strong America as the country recovers from the pandemic and beyond,” Goodin adds. “Our balance sheet is strong with ample liquidity, and we expect solid operational performance the remainder of the year while maintaining modified work practices in light of health guidelines around COVID-19.

According to MDU Resources, its construction services business has an all-time record backlog of work, and its construction materials business’ backlog is near last year’s record level. The construction materials backlog of work at March 31 was $905 million – versus a record $943 million at March 31, 2019.

Construction materials and services

MDU’s construction materials business experienced a seasonal loss in the first quarter of $38.2 million. That compares to a loss of $34.4 million in the first quarter of 2019.

Although favorable weather in the first quarter allowed the company to begin construction work in certain areas earlier than in 2019, MDU says quarterly earnings were negatively impacted by higher payroll-related costs and lower investment returns. 

MDU’s construction services business, meanwhile, had record quarterly revenues – up about 22 percent over last year’s record first-quarter revenues. Earnings were $16.8 million for the quarter, compared to $20 million in the first quarter of 2019.