MDU - MDU Resource to seek separation of construction services business

2023-07-10 17:21:22 ET

MDU Resources ( NYSE: MDU ) +2.1% post-market Monday after saying it will pursue a potential tax-advantaged separation of its construction services business, which it said will support its goal of enhancing value for stockholders by becoming a pure-play regulated energy delivery company.

MDU ( MDU ) said MDU Construction Services Group posted record revenue of $2.7B in 2022 and a record backlog of $2.13B as of December 31; for 2023, the company has said it forecasts construction services revenues of $2.8B-$3B, with margins slightly higher than in 2022, and EBITDA of $200M-$225M.

MDU Resources ( MDU ) said it plans to spend $2.5B on capital projects at its regulated energy delivery businesses over the next five years, with utility rate base expected to grow 6%-7% on a compounded annual basis during the period.

On June 1, the company completed the spinoff of its Knife River construction materials subsidiary into a stand-alone, publicly traded company.

More on MDU Resources:

• Financial and valuation comparison to sector peers
• Analysis: MDU Resources: Backlog, Rate Hikes And Infrastructure Funding Should Drive Growth
• Stock price return: Down less than 1% YTD, up 12% in the past 12 months

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