SEMPRA Quarterly Report for Q1 Ended Mar 31, 2022

Summary

Sempra Energy (SRE) reported its first-quarter 2022 financial results, showing a decrease in earnings attributable to common shares compared to the prior year period, primarily driven by factors within its Sempra Infrastructure segment, including unfavorable foreign currency and inflation effects and lower earnings from asset optimization. The utility segments, SDG&E and SoCalGas, saw mixed results, with SDG&E reporting an increase in earnings due to higher base operating margins, while SoCalGas experienced a decrease primarily due to charges related to the Aliso Canyon leak litigation and penalties from regulatory matters. The company continued its strategic focus on infrastructure development, particularly in the Sempra Infrastructure segment, with ongoing progress on projects like the ECA LNG Phase 1. Sempra also announced an agreement to sell a noncontrolling interest in its Sempra Infrastructure Partners to ADIA for $1.8 billion, expected to close in the second quarter of 2022, which will provide significant proceeds for capital expenditures and debt reduction. Key financial highlights include total revenues of $3.82 billion, a decrease in diluted EPS to $1.93 from $2.87 year-over-year, and a continued focus on managing debt and liquidity with significant credit facilities available. The company also continued its share repurchase program, demonstrating a commitment to returning capital to shareholders.

Key Highlights

• 1Total revenues increased to $3.82 billion in Q1 2022 from $3.26 billion in Q1 2021.
• 2Earnings attributable to common shares decreased to $612 million ($1.93 per diluted share) in Q1 2022, down from $874 million ($2.87 per diluted share) in Q1 2021.
• 3Sempra Infrastructure's earnings decreased significantly, primarily due to unfavorable foreign currency and inflation effects and lower earnings from asset optimization.
• 4SDG&E's earnings increased by $22 million due to higher CPUC base operating margins, while SoCalGas' earnings decreased by $73 million, largely due to litigation charges related to the Aliso Canyon leak and regulatory penalties.
• 5Sempra completed an Accelerated Share Repurchase (ASR) program for $200 million in the first quarter and entered into another for $250 million in April 2022.
• 6The company made significant progress toward closing the sale of a 10% noncontrolling interest in SI Partners to ADIA for $1.8 billion, expected in Q2 2022.
• 7Sempra Infrastructure recorded $1.57 billion in equity method and other investments as of March 31, 2022.

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