Core Viewpoint - Sempra is taking strategic actions to simplify its portfolio and recycle capital to support growth in its Texas and California utilities, including the sale of certain energy infrastructure assets in Mexico and a minority stake in Sempra Infrastructure Partners [1][2]. Asset Sales - Sempra Infrastructure plans to sell Ecogas México, which operates three utility franchises and has over 5,000 kilometers of distribution pipelines serving more than 600,000 consumers in Mexico [3]. - The sale of Ecogas is part of a strategy to divest non-core assets and focus on the U.S. utilities [14]. Minority Stake Sale - The company is initiating a process to sell a minority interest in Sempra Infrastructure, which has a strong position in liquefied natural gas (LNG) assets [4]. - Previous sales of non-controlling interests in Sempra Infrastructure were valued at approximately $16.9 billion in 2021 and $17.9 billion in 2022 [4]. LNG Growth Opportunities - Sempra Infrastructure is expanding its LNG franchise, with projects like Energía Costa Azul LNG Phase 1 expected to commence operations in spring 2026, and Port Arthur LNG Phase 1 on track for 2027 and 2028 [5][6]. - The company is in discussions for Phase 2 of Port Arthur LNG, which has strong commercial interest and aims for a final investment decision in 2025 [6][7]. Value Creation Initiatives - The announced sales are part of five value creation initiatives for 2025, aimed at increasing long-term value for shareholders and stakeholders [8]. - These transactions are expected to be accretive to earnings-per-share forecasts and enhance the company's credit profile [9].

Core Insights - Canadian Net Real Estate Investment Trust reported its Q4 2024 results, indicating a pivotal year with successful capital recycling initiatives and a focus on high-quality retail properties [2][3][4] - The REIT announced monthly distributions for Q2 2025, maintaining a consistent distribution per unit [9][21] Financial Performance - For Q4 2024, Canadian Net reported Funds from Operations (FFO) of $3.25 million, or $0.158 per unit, a decrease from $3.34 million, or $0.162 per unit in Q4 2023 [3][4] - Rental income for Q4 2024 was $6.8 million, down 6.4% from Q4 2023, while Net Operating Income (NOI) was $4.8 million, a decrease of 2.8% [4][16] - For the twelve-month period ended December 31, 2024, FFO was $12.36 million, or $0.601 per unit, compared to $13.06 million, or $0.635 per unit for the same period in 2023 [5][6] - Total rental income for the twelve-month period was $26.1 million, a decrease of 1.6% from 2023, with NOI at $18.9 million, down 2.6% [6][7] Capital Recycling and Portfolio Quality - The REIT successfully reinvested proceeds from the sale of five gas station properties into four necessity-based retail properties leased to national triple-A tenants, enhancing portfolio quality and resilience [2][4] - The portfolio remains at 100% occupancy, positioning the REIT well to navigate the current macroeconomic environment [2][4] Distributions - Canadian Net announced monthly cash distributions of $0.02875 per unit for April, May, and June 2025, maintaining an annualized distribution of $0.345 per unit [9][21] Non-IFRS Financial Measures - The REIT reported a decrease in FFO and Normalized FFO primarily due to higher interest charges on mortgage renewals and declines in rental income from property dispositions [8][12] - Adjusted Funds from Operations (AFFO) for the twelve-month period was $11.59 million, with AFFO per unit at $0.564, reflecting a slight decrease from the previous year [18]

Financial Data and Key Metrics Changes - Adjusted EBITDA nearly tripled from $190 million in 2023 to $540 million in 2024 [6] - GAAP EPS totaled $0.24 per share for Q4, compared to a loss of $1.78 in Q4 2023 [18] - Investment management revenue grew by 83% to $30 million in Q4 [19] Business Line Data and Key Metrics Changes - Investment management fees grew by 60% year-over-year to approximately $100 million in 2024 [8] - The credit platform completed a record $1.4 billion of new loan originations in Q4 and $3.5 billion for the year [9] - Same-property NOI grew by 5.6% in Q4 [15] Market Data and Key Metrics Changes - The overall market environment is showing steady improvement with strengthening debt markets and rebounding transaction volume [7] - The apartment portfolio ended the quarter with 95% occupancy, with demand driven by high homeownership costs [28] - The Irish apartment portfolio ended the quarter at a strong 97% occupancy [34] Company Strategy and Development Direction - The company focuses on increasing baseline EBITDA, growing the investment management business, and reducing unsecured debt [6] - Capital recycling through non-core asset sales is a core focus, with an expected generation of over $400 million in 2025 [13] - The company aims to deploy capital into higher return opportunities, particularly within investment management platforms [13] Management's Comments on Operating Environment and Future Outlook - Management anticipates a very active year in 2025, committed to executing key initiatives while strengthening the balance sheet [17] - The company is well-positioned to capitalize on new opportunities in rental housing and industrial assets as market conditions recover [16] - Management expressed confidence in the business environment in the U.S. and the attractiveness of investing in U.S. real estate [95] Other Important Information - The company successfully closed fundraising on its seventh discretionary commingled fund, securing $400 million for U.S. investments [11] - The company has a total of $28 billion in assets under management, producing an estimated annual NOI of $467 million [14] Q&A Session Summary Question: Clarification on $400 million of incremental proceeds from dispositions in 2025 - Yes, the company plans to focus on non-core assets, particularly in housing-related investments [44][46] Question: Construction lending environment and commitments - The company believes the construction lending space remains compelling and expects to have a successful year [50] Question: Importance of adding more equity capital - The company has significant institutional partners interested in investing in the U.S. and U.K. markets, with expectations to deploy more equity opportunities [54][56] Question: Refinancing debt in Ireland - The company is refinancing at mid-4s, replacing an in-place rate just under 3% [66] Question: Expected yields and margins on the SFR platform - The company anticipates stabilizing yields in the high 5s towards 6% [72] Question: Future funding for the debt platform - The company aims to exceed $3.5 billion in originations this year, with strong demand from investors [78] Question: Rent caps in Ireland and implications for U.K. office demand - The company is monitoring the rent regime in Ireland and sees strong demand for quality offices in the U.K. [83][101] Question: Positive fair value marks on the co-investment portfolio - The company hopes for continued positive fair value marks if rates stabilize and operational improvements continue [86][88]