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Sempra(SRE) - 2024 Q4 - Earnings Call Transcript
SRESempra(SRE)2025-02-25 21:16
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Financial Data and Key Metrics Changes - The company reported adjusted EPS of 4.65for2024,slightlybelowthemidpointofguidance[9]−Full−year2024GAAPearningswere4.65 for 2024, slightly below the midpoint of guidance [9] - Full-year 2024 GAAP earnings were 2.817 billion or 4.42pershare,comparedto4.42 per share, compared to 3.030 billion or 4.79persharein2023[78]−Therevised2025EPSguidancerangeissetat4.79 per share in 2023 [78] - The revised 2025 EPS guidance range is set at 4.30 to 4.70,reflectingadownwardadjustmentfrompriorexpectations[13][90]BusinessLineDataandKeyMetricsChanges−SempraCaliforniasawa4.70, reflecting a downward adjustment from prior expectations [13][90] Business Line Data and Key Metrics Changes - Sempra California saw a 46 million increase in adjusted earnings primarily from higher electric transmission margins and operating margins [79] - Sempra Texas reported 43millionofhigherequityearningsduetoincreasedcapitalandcustomergrowth,offsetbyhigherinterestandoperatingexpenses[79]−SempraInfrastructureexperienceda43 million of higher equity earnings due to increased capital and customer growth, offset by higher interest and operating expenses [79] - Sempra Infrastructure experienced a 170 million decrease in transportation earnings due to new tariffs and lower volumes in the renewables business [79] Market Data and Key Metrics Changes - Texas added over half a million new residents from July 2023 to July 2024, indicating strong economic growth [12] - The anticipated electricity demand in Texas is expected to nearly double by the end of the decade, creating significant infrastructure investment opportunities [12] - The California Energy Commission projects a 2.8% annual growth in statewide electricity consumption from 2023 through 2030 [51] Company Strategy and Development Direction - The company is launching a record 56billioncapitalplanfor2025to2029,a1656 billion capital plan for 2025 to 2029, a 16% increase over the previous plan, focusing on regulated utilities [17][80] - The corporate strategy emphasizes disciplined investments in regulated utilities with constructive regulation, aiming for a compound annual rate-based growth of 10% [25] - The long-term EPS growth rate is raised to 7% to 9%, supported by strong growth in Sempra Texas [15][100] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in making the right decisions for future growth despite the revised 2025 guidance [14] - The company anticipates that the financial impact of Oncor's base rate review will not fully reflect in intermediate-term results due to regulatory lag [90] - Management highlighted the importance of a disciplined capital allocation process to finance growth efficiently [82] Other Important Information - Sempra's board approved an increase in the annualized dividend to 2.58 per share, marking the fifteenth consecutive year of dividend increases [16] - The company ended 2024 with a utility rate base of 56billionandaimstoexpandittoover56 billion and aims to expand it to over 91 billion by 2029 [83] Q&A Session All Questions and Answers Question: Regarding the 2025 rebates, is the plan embedding lower rate-based growth in California, or is that partially moved to future plan years? - Management indicated that the California GRC came in below planning assumptions, impacting the front end of the plan [104] Question: In Texas, does the higher interest and investment cost in 2025 reverse with the potential base rate filing? - Management noted that the decision for Oncor to file for a base rate review is expected to reset its cost structure, which may put downward pressure on earnings for the year [105]