(Sempra, 24.Mar.2020) — Sempra Energy’s senior management team is providing an update on the company’s business strategy on an Investor Day conference call, including details on the company’s five-year capital plan, projected rate base growth, segment-level earnings guidance and planned improvements to balance sheet strength.
“In the midst of a global health crisis, our first obligation is to the health and safety of our employees and the communities we serve,” said Jeffrey W. Martin, chairman and CEO of Sempra Energy. “Building resilience into our business model and investing in safe and reliable infrastructure is at the core of our strategy.”
“At Sempra Energy, our five-year capital plan – the most robust in our company’s history – gives us great visibility into sustainable earnings growth that should help create long-term value for our stakeholders,” added Martin. “Our strategy also focuses our investments within the most attractive markets in North America, with a sharp focus on the portion of the energy value chain where we believe we can create the most attractive risk-adjusted returns.”
Sempra Energy reiterated its five-year capital plan of approximately $32 billion, primarily focused on investments at the company’s U.S. utilities – San Diego Gas & Electric Co. (SDG&E), Southern California Gas Co. (SoCalGas) and Oncor Electric Delivery Co. LLC. These investments support safety, reliability and sustainability for the benefit of customers and all stakeholders. The capital plan results in a projected 9% rate base compound annual growth rate (CAGR) for 2019 to 2024, and a projected combined rate base of more than $51 billion in 2024.
Sempra Energy’s full-year 2020 GAAP earnings-per-share (EPS) guidance range is $12.78 to $14.26 and includes the estimated gain on the sale of the company’s South American businesses. Today, the company reaffirmed its full-year 2020 adjusted EPS guidance range of $6.70 to $7.50 and 2021 guidance range of $7.50 to $8.10.
Additionally, Sempra Energy continues to focus on strengthening its balance sheet to create financial flexibility and fund future growth. Across its consolidated family of companies, Sempra Energy has approximately $6.4 billion in liquidity, including cash and available credit capacity. In addition, Oncor has $2.3 billion in liquidity, including cash and available credit capacity dedicated to their operations. In connection with its financial plan, Sempra Energy does not have current plans for equity offerings.
In 2019, Sempra Energy announced two agreements that would conclude the company’s planned sale of its South American businesses for expected combined after-tax cash proceeds of approximately $4.55 to $4.85 billion, subject to adjustments and satisfaction of closing conditions. Both of the company’s South American sale transactions, one to sell Sempra Energy’s equity interests in its Peruvian businesses and the other to sell its equity interests in its Chilean businesses, continue to advance and are expected to be completed in the next three to six weeks. The expected sale proceeds will be used to strengthen the company’s balance sheet and help fund future growth.
Across Sempra Energy’s liquefied natural gas (LNG) business, the company continues to target portfolio returns above those of its U.S. utility businesses and continues to advance its development projects with a disciplined approach.
Phase 1 of the Cameron LNG liquefaction-export project in Hackberry, Louisiana, is nearing completion. Once complete, Sempra Energy’s share of full-year run-rate earnings from Phase 1, which includes the first three trains, are projected to be between $400 million and $450 million annually under Cameron LNG’s tolling agreements. Sempra Energy indirectly owns 50.2% of Cameron LNG. Cameron LNG is jointly owned by affiliates of Sempra LNG, Total S.A., Mitsui & Co., Ltd., and Japan LNG Investment, LLC, a company jointly owned by Mitsubishi Corporation and Nippon Yusen Kabushiki Kaisha.
Phase 1 of the Energía Costa Azul (ECA) LNG liquefaction-export project, under development in Baja California, Mexico, continues to move forward. Earlier this month, ECA LNG signed a fixed-price, lump-sum, turn-key engineering, procurement and construction (EPC) contract with Technip FMC. ECA LNG is targeting a final investment decision in the second quarter of 2020.
Additionally, earlier this month, Port Arthur LNG, LLC and Bechtel Oil, Gas, and Chemicals, Inc., signed a fixed-price EPC contract for the Port Arthur LNG liquefaction project under development in Port Arthur, Texas, and site preparation work continues.
While the majority of Sempra Energy’s businesses are considered critical by the federal government and are currently operating without material disruptions, the fast-evolving global health crisis adds more uncertainty to the projections contained in this press release and the projections planned for the company’s Investor Day conference call.
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