Sempra Enjoys the Good Time

Sempra Enjoys the Good Time

Jul 17 - Power Economics

US ENERGY COMPANY SEMPRA is celebrating first quarter figures which have seen its net income for that period more than double to $197 million from $88 million a year ago.

The energy merchant company say that the improvement stems from improved results across all divisions. The San Diego company posted revenues of $2.4 billion, up from $1.9 billion a year ago, primarily from increased gas and power deliveries and higher commodity prices.

The company's energy marketing unit, Sempra Energy Trading, reported a net income for the first quarter of $59 million, nearly six times that of the $10 million a year earlier. The unit sold an average 13.7 BCf per day of gas during the quarter, an increase of 1.5 Bcf per day dur ing the same quarter the year before. It also sold 92.9 billion kWh of electricity, a 41 per cent increase from the 66.1 billion KWh sold in 2003.

"Our first-quarter results reflect the continued execution of our strategy,", according to Stephen Baum, Sempra's chief executive. "Our energy trading and generation units, as well as our California utilities, are producing solid earnings and positive cash flow."

While gas sales volumes remained relatively flat compared to 2003 levels, trading margins on gas were the highest among all the commodities on Sempra's books, according to company executives.

Baum confirmed this: "Sempra Energy Trading has grown to become the second-largest marketer of physical natural gas in North America and has recorded 21 consecutive profitable quarters, excluding the first-quarter 2003 mandated accounting change," he said. "This customer-focused business continues to benefit from solid risk management and a diverse portfolio of products."

In a separate development though, Sempra Energy suffered a blow when a regulatory affairs manager was convicted of fraud in relation to his role at another company. EIe has been dismissed from Sempra, and will be sentenced on 16 July.

E. Douglas Mitchell was president of PowerSource Corp., a company formed to sell electricity in California's deregulated market. Investors were not told that 60 per cent of their investments, made in units of $10,000 were paid to marketers as commission.

For far more extensive news on the energy/power visit: http://www.energycentral.com .