UGI Corporation (NYSE:UGI), a Pennsylvania-based energy and transportation organization, announced a change in its independent registered public accounting firm. On Monday, the company's Audit Committee completed a comprehensive review and evaluation of proposals from several qualified accounting firms, which resulted in the appointment of KPMG LLP as the new auditor for the fiscal year ending September 30, 2025.
The appointment of KPMG follows the dismissal of Ernst & Young LLP (EY), which has audited the company's financial statements for the fiscal years ended September 30, 2023 and 2022. According to UGI, the transition will take effect upon the release of EY's report on the company’s consolidated financial statements for the fiscal year ended September 30, 2024.
UGI clarified that during the fiscal years audited by EY, and the subsequent period through Monday, there were no disagreements on accounting principles or practices, financial statement disclosure, or auditing scope or procedure. Additionally, no reportable events, as defined by the SEC regulations, occurred during this time.
The company also disclosed that it had not consulted KPMG on any accounting or auditing matters during the fiscal years in question.
As part of the regulatory process, UGI Corporation has received and filed a letter from EY to the U.S. Securities and Exchange Commission, dated today, confirming EY's agreement with the statements made in the 8-K filing.
In other recent news, UGI Corporation reported a noteworthy increase in its adjusted earnings per share (EPS) for the third quarter of fiscal year 2024, recording $0.06 compared to a breakeven in the prior year. This growth is attributed to the company's strategic moves, including the divestiture of its natural gas-fired facility in Pennsylvania and LPG business in Switzerland, which have contributed to operational efficiency and environmental responsibility.
UGI Corporation has also made significant strides in strengthening its balance sheet, reducing debt, and optimizing its portfolio. The company achieved a 50% reduction in Scope 1 emissions and a 25% increase in diverse supplier spending, demonstrating commitment to sustainable practices.
The company is on track to achieve its adjusted EPS guidance for fiscal year 2024 and anticipates substantial cost savings by the end of fiscal year 2025. Capital expenditures of approximately $510 million were primarily allocated to regulated utilities and infrastructure replacement, reflecting the company's focus on its core operations.
UGI Corporation's leverage ratio stands at 3.9 times, within the target range of 3.5 to 4 times. Despite a slight increase in AmeriGas leverage and a minor decrease in investment in the Utility sector, the company has successfully divested non-core assets and reduced its absolute debt by approximately $300 million since the beginning of fiscal 2023. These are recent developments that highlight UGI Corporation's proactive approach to managing its financial health and investing in its core operations.
InvestingPro Insights
UGI Corporation's decision to change its independent auditor comes at a time when the company is showing strong financial performance and shareholder value. According to InvestingPro data, UGI's P/E ratio stands at 7.71, indicating that the stock may be undervalued compared to its earnings. This is further supported by an InvestingPro Tip highlighting that UGI is trading at a low earnings multiple.
The company's commitment to shareholder returns is evident in its dividend policy. UGI boasts a dividend yield of 6.01% and has maintained dividend payments for 54 consecutive years, as noted in an InvestingPro Tip. This long-standing track record of dividend payments aligns with the company's focus on financial stability and shareholder value, which may have influenced the decision to engage a new auditor to ensure continued transparency and accuracy in financial reporting.
Moreover, UGI's revenue for the last twelve months as of Q3 2024 was $7,372 million, with a gross profit margin of 53.2%. These figures suggest a solid financial foundation as the company transitions to KPMG as its new auditor. For investors seeking more comprehensive analysis, InvestingPro offers 8 additional tips that could provide further insights into UGI's financial health and future prospects.
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