SEMPRA Quarterly Report for Q3 Ended Sep 30, 2023

Summary

Sempra (SRE) reported solid financial results for the nine months ended September 30, 2023, with net income attributable to common shares increasing to $2.29 billion from $1.66 billion in the prior year, reflecting strong performance across its key segments, particularly Sempra Infrastructure and SoCalGas. The company demonstrated robust operating cash flows and managed its capital expenditures effectively, with a significant portion allocated to infrastructure improvements and growth projects. Sempra Infrastructure's earnings saw a substantial increase driven by asset and supply optimization, while SoCalGas's earnings recovered significantly due to the resolution of litigation and regulatory matters related to the Aliso Canyon leak, alongside favorable income tax benefits. SDG&E also showed a modest increase in earnings, supported by higher transmission margins and regulatory interest income. Looking ahead, Sempra continues to invest heavily in its energy infrastructure, with a significant capital expenditure plan focused on modernization and expansion. The company's credit ratings remain at investment grade, supported by strong liquidity and access to capital markets. Investors should monitor regulatory developments, particularly those impacting SDG&E and SoCalGas, and the ongoing large-scale infrastructure projects within Sempra Infrastructure.

Key Highlights

• 1Sempra reported a significant year-over-year increase in net income attributable to common shares, reaching $2.29 billion for the first nine months of 2023, up from $1.66 billion in the same period of 2022.
• 2Sempra Infrastructure showed a substantial earnings increase, driven by asset optimization, favorable foreign currency impacts, and lower net interest expense.
• 3SoCalGas's earnings rebounded from a loss in the prior year to a significant profit, primarily due to the resolution of Aliso Canyon litigation and regulatory matters, alongside positive income tax benefits.
• 4SDG&E experienced a modest increase in earnings, supported by higher electric transmission margins and regulatory interest income, though partially offset by higher income tax expense.
• 5Capital expenditures remain robust, with a total of $6.35 billion for the nine months ended September 30, 2023, primarily focused on infrastructure improvements and large-scale projects like the PA LNG Phase 1 project.
• 6The company maintains strong liquidity with substantial available unused credit and is committed to its investment-grade credit ratings.
• 7Sempra announced a two-for-one stock split in the form of a stock dividend, effective August 22, 2023.

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