Sempra (SRE) Bundle
A Brief History of Sempra
Sempra, a leading energy infrastructure company, was founded in 1998 and has since established itself as a significant player in the energy sector. As of 2024, the company has achieved substantial financial milestones and operational growth.
Financial Performance Overview
In the nine months ending September 30, 2024, Sempra reported a net income of $2.511 billion, compared to $2.327 billion in the same period of 2023. The comprehensive income for the same period was $2.463 billion, reflecting a strong operational performance despite market fluctuations.
| Financial Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Net Income (in billions) | $2.511 | $2.327 |
| Comprehensive Income (in billions) | $2.463 | $2.327 |
| Operating Revenues (in billions) | $4.168 | $6.574 |
| Operating Expenses (in billions) | $3.534 | $5.762 |
Debt Issuances
In 2024, Sempra issued various debt instruments to support its financial strategy. In March 2024, the company issued $600 million of 6.875% fixed-to-fixed reset rate junior subordinated notes, followed by another issuance of $500 million in May 2024. In September 2024, Sempra raised $1.25 billion through the issuance of 6.40% fixed-to-fixed reset rate junior subordinated notes.
Cash Flow Analysis
For the nine months ended September 30, 2024, Sempra's cash flow from operating activities totaled $3.542 billion, showing a decrease from $5.129 billion in the previous year. The cash used in investing activities was $6.296 billion, while cash provided by financing activities amounted to $3.066 billion.
| Cash Flow Component | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Cash from Operating Activities (in billions) | $3.542 | $5.129 |
| Cash Used in Investing Activities (in billions) | $6.296 | $6.304 |
| Cash from Financing Activities (in billions) | $3.066 | $2.198 |
Asset Management
As of September 30, 2024, Sempra's total assets were valued at $30.765 billion, an increase from $29.185 billion at the end of 2023. The company’s property, plant, and equipment netted $24.628 billion after accounting for depreciation.
| Balance Sheet Item | 2024 (September 30) | 2023 (December 31) |
|---|---|---|
| Total Assets (in billions) | $30.765 | $29.185 |
| Property, Plant, and Equipment (net, in billions) | $24.628 | $23.549 |
Dividends and Shareholder Returns
Sempra has remained committed to returning value to its shareholders. For the three months ended September 30, 2024, the company declared dividends of $1.93 per share, totaling $225 million, compared to $0.86 per share in the same quarter of the previous year.
| Dividend Information | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Dividend per Share | $1.93 | $0.86 |
| Total Dividends Declared (in millions) | $225 | $100 |
Through strategic financial management, Sempra continues to solidify its position in the energy sector while enhancing shareholder value.
A Who Owns Sempra (SRE)
Major Shareholders
As of 2024, Sempra Energy (SRE) has a diverse ownership structure. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage |
|---|---|
| Sempra Energy | 70% |
| KKR Pinnacle | 20% |
| Abu Dhabi Investment Authority (ADIA) | 10% |
Institutional Ownership
Institutional investors play a significant role in Sempra's ownership. The following table provides a breakdown of institutional ownership as of 2024:
| Institution | Ownership Percentage |
|---|---|
| The Vanguard Group, Inc. | 8.5% |
| BlackRock, Inc. | 7.2% |
| State Street Corporation | 5.9% |
| Fidelity Investments | 4.3% |
| Invesco Ltd. | 3.1% |
Insider Ownership
Insider ownership also contributes to Sempra's equity structure. The following table shows the ownership percentages of key insiders:
| Name | Position | Ownership Percentage |
|---|---|---|
| Jeffrey W. Martin | CEO | 0.5% |
| Trevor J. Mihalik | CFO | 0.3% |
| Other Executives | Various | 1.2% |
Non-controlling Interests
Sempra has non-controlling interests (NCI) in various projects, specifically in SI Partners. The ownership structure of SI Partners is detailed below:
| Entity | Ownership Percentage |
|---|---|
| KKR Denali | 60% |
| ConocoPhillips | 30% |
| TotalEnergies SE | 16.6% |
In the first nine months of 2024, Sempra Infrastructure distributed $235 million to its NCI owners, while NCI owners contributed $1,121 million to Sempra Infrastructure.
Financial Overview
As of September 30, 2024, Sempra's total equity amounted to $35.88 billion, with the following breakdown:
| Equity Component | Amount (in millions) |
|---|---|
| Preferred Stock | $889 |
| Common Stock | $12,292 |
| Retained Earnings | $16,707 |
| Accumulated Other Comprehensive Income | ($185) |
| Total Equity | $35,880 |
Furthermore, Sempra's assets as of September 30, 2024, were reported at approximately $93.75 billion, reflecting the company's robust financial standing.
Sempra (SRE) Mission Statement
Overview of Mission Statement
Sempra Energy's mission is to deliver sustainable energy solutions that empower customers and communities. The company focuses on safety, sustainability, and innovation, aiming to lead the transition to a lower-carbon future while providing reliable energy services.
Financial Performance Indicators
As of September 30, 2024, Sempra reported notable financial metrics:
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Natural Gas Revenues | $1.2 billion | $1.5 billion | -20% |
| Cost of Natural Gas | $99 million | $260 million | -62% |
| Operation & Maintenance Expenses | $1.3 billion | $1.4 billion | -4% |
| Net Income | $759 million | $854 million | -11% |
| Earnings per Share (EPS) | $1.01 | $1.14 | -11% |
Strategic Priorities
- Safety: Prioritizing the safety of employees and the communities served.
- Sustainability: Committing to reducing carbon emissions and enhancing energy efficiency.
- Innovation: Investing in technology and infrastructure to improve energy delivery.
- Customer Empowerment: Providing customers with tools and resources to manage their energy use effectively.
Recent Developments
In March 2024, Sempra issued $600 million in junior subordinated notes with a fixed rate of 6.875%, and in September 2024, issued $1.25 billion worth of notes at a 6.40% rate, maturing in 2054. These funds are earmarked for general corporate purposes and debt repayment.
Investment in Infrastructure
Sempra's capital expenditures reflect its commitment to infrastructure development:
| Segment | Capital Expenditures (2024) | Capital Expenditures (2023) |
|---|---|---|
| Sempra California | $3.3 billion | $3.3 billion |
| Sempra Infrastructure | $2.4 billion | $2.7 billion |
| Total | $6.4 billion | $6.4 billion |
Community Engagement and Social Responsibility
Sempra emphasizes its role in community development through various initiatives aimed at enhancing local economies and supporting social causes.
Regulatory Environment
Sempra operates under stringent regulatory frameworks, impacting its operational strategies and financial performance. The company actively works with regulatory bodies to ensure compliance and promote sustainable practices.
Future Outlook
Looking ahead, Sempra aims to enhance its portfolio in renewable energy while continuing to optimize its existing operations to drive efficiency and profitability.
How Sempra (SRE) Works
Overview of Sempra's Operations
Sempra operates primarily through three segments: Sempra California, Sempra Texas Utilities, and Sempra Infrastructure. Each segment plays a critical role in providing energy services and infrastructure development across the United States and Mexico.
Sempra California
Sempra California includes San Diego Gas & Electric (SDG&E) and Southern California Gas Company (SoCalGas). This segment is responsible for natural gas and electric services in Southern California.
| Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Earnings | $247 million | $290 million | $1.145 billion | $1.247 billion |
| Natural Gas Revenues | $1.186 billion | $1.474 billion | $4.750 billion | $7.506 billion |
| Cost of Natural Gas | $97 million | $257 million | $777 million | $3.283 billion |
Sempra Texas Utilities
This segment includes Oncor Electric Delivery Company, which manages electric transmission and distribution in Texas.
| Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Earnings | $261 million | $305 million | $646 million | $548 million |
| Key Drivers | Higher revenues from rate updates | Higher revenues from rate updates | New base rates implemented | Customer growth |
Sempra Infrastructure
Sempra Infrastructure focuses on developing and managing energy infrastructure, particularly in natural gas and renewable energy sectors.
| Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Earnings | $230 million | $223 million | $652 million | $746 million | Key Drivers | Foreign currency impacts | Increased revenues | Higher development costs | Lower revenues from wind assets |
Financial Performance
Sempra's overall earnings for the third quarter of 2024 totaled $638 million, a decrease from $721 million in Q3 2023. For the nine months ended September 30, 2024, total earnings attributable to common shares were $2.152 billion, compared to $2.293 billion for the same period in 2023.
| Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Earnings | $638 million | $721 million | $2.152 billion | $2.293 billion |
| Effective Income Tax Rate | (32)% | (11)% | (4)% | 19% |
| Interest Expense | $328 million | $312 million | $944 million | $995 million |
Market Trends and Regulatory Environment
Sempra operates within a highly regulated environment, particularly in California, where the California Public Utilities Commission (CPUC) oversees pricing and service standards. The regulatory framework allows for the recovery of certain costs through rates, which has a significant impact on overall profitability.
Future Commitments and Investments
Sempra has committed to significant investments in infrastructure, particularly in renewable energy projects and natural gas facilities, to support the energy transition. Future minimum lease payments related to LNG projects are projected to be $10 million in 2027, increasing to $210 million thereafter through 2047.
| Year | Minimum Lease Payments (in millions) |
|---|---|
| 2027 | $10 |
| 2028 | $12 |
| 2029 and beyond | $210 |
Conclusion on Financial Position
As of September 30, 2024, total assets for Sempra California amounted to $56.220 billion, Sempra Texas Utilities at $15.292 billion, and Sempra Infrastructure at $21.828 billion, reflecting a strong asset base across its operational segments.
| Segment | Total Assets (in billions) |
|---|---|
| Sempra California | $56.220 |
| Sempra Texas Utilities | $15.292 |
| Sempra Infrastructure | $21.828 |
How Sempra (SRE) Makes Money
Overview of Sempra's Business Segments
Sempra Energy operates through several key segments, primarily focusing on utility operations, infrastructure, and energy-related businesses. Key subsidiaries include San Diego Gas & Electric (SDG&E) and SoCalGas. As of September 30, 2024, Sempra's total revenues amounted to $2.776 billion for the three months ended, down from $3.334 billion in the same period of 2023.
| Segment | Three Months Ended September 30, 2024 (in millions) | Three Months Ended September 30, 2023 (in millions) | Nine Months Ended September 30, 2024 (in millions) | Nine Months Ended September 30, 2023 (in millions) |
|---|---|---|---|---|
| Sempra California | 2,256 | 2,725 | 8,022 | 10,840 |
| Sempra Infrastructure | 538 | 629 | 1,466 | 2,485 |
| Adjustments and Eliminations | (1) | (1) | (1) | (1) |
| Total Revenues | 2,776 | 3,334 | 9,427 | 13,229 |
Revenue Sources
Sempra generates revenue through several key activities:
- Utility Operations: Primarily from SDG&E and SoCalGas, which are regulated by the California Public Utilities Commission (CPUC). They recover costs of natural gas and electricity sold to customers, ensuring stable revenue streams.
- Infrastructure Investments: Involves investments in energy infrastructure, including pipelines and storage facilities, contributing to long-term revenue through contracts and leases.
- Energy-Related Businesses: Engages in energy trading and the optimization of assets, providing additional revenue through contracts for natural gas and liquefied natural gas (LNG).
Financial Performance
For the three months ended September 30, 2024, Sempra reported a net income of $759 million, compared to $854 million in the same period of 2023. This reflects a decrease of 11% year-over-year.
In terms of operating income:
| Category | Three Months Ended September 30, 2024 (in millions) | Three Months Ended September 30, 2023 (in millions) |
|---|---|---|
| Operating Income | 1,787 | 1,814 |
| Other Income, Net | 65 | 3 |
Cost Structure
Sempra's cost of sales for energy-related businesses decreased by $29 million (18%) to $134 million for the three months ended September 30, 2024, primarily driven by lower natural gas prices.
In the nine months ending September 30, 2024, the total cost of sales was $297 million, a decrease of 32% compared to $437 million in the same period of 2023.
Natural Gas and Electric Revenues
Natural gas revenues for Sempra California were reported at $1.186 billion for the three months ended September 30, 2024, down from $1.474 billion in 2023. Electric revenues for the same period were $1.069 billion, compared to $1.250 billion in 2023.
| Revenue Type | Three Months Ended September 30, 2024 (in millions) | Three Months Ended September 30, 2023 (in millions) |
|---|---|---|
| Natural Gas Revenues | 1,195 | 1,488 |
| Electric Revenues | 1,069 | 1,250 |
Operational Highlights
During the nine months ended September 30, 2024, Sempra's operational metrics showed:
- Total operating expenses decreased by 2% to $3.9 billion.
- Depreciation and amortization expenses increased to $1.811 billion from $1.651 billion year-over-year.
- Interest expense decreased by $51 million (5%) to $944 million, attributed to lower interest rates on debt balances.
Equity Earnings
Equity earnings from joint ventures and partnerships were $454 million for the three months ended September 30, 2024, slightly down from $479 million in the same quarter of 2023.
Income Taxes
Sempra recorded an income tax benefit of $105 million for the three months ended September 30, 2024, compared to a benefit of $52 million in 2023. The effective income tax rate was -32% for the third quarter of 2024.
Future Outlook
Sempra expects continued growth driven by regulatory adjustments and infrastructure investments, with a focus on expanding its LNG capabilities and optimizing energy supply contracts.
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Resources:
- Sempra (SRE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Sempra (SRE)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Sempra (SRE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.