Enbridge Meets Estimates, Closes Multiple Acquisitions in Quarter

Enbridge Inc. reported third-quarter net income of $0.93 billion (CAD 1.3 billion), compared to $0.36 billion (CAD 0.5 billion) in the same period in 2023.

Adjusted net income was $0.86 billion (CAD 1.2 billion), compared with $0.93 billion (CAD 1.3 billion) in the previous-year quarter, the company said in its latest earnings release. Earnings per share for the quarter was CAD 0.40, in line with the Zacks Consensus Estimate.

Enbridge’s adjusted earnings before interest, income taxes and depreciation and amortization (EBITDA) was $3 billion (CAD 4.2 billion), an increase of 8 percent year over year.

Last month, Enbridge reported that it closed its acquisition of two additional docks and land adjacent to the Enbridge Ingleside Energy Center EIEC from Flint Hills Resources for a total purchase price of approximately $0.2 billion.

The acquisition enables optimization of EIEC's existing docks by increasing Very Large Crude Carrier (VLCC) windows on the primary facility docks, Enbridge said, adding that the new docks and land will help unlock valuable growth opportunities at EIEC. Onsite integration work and additional construction at the docks is underway, with expected completion in 2025.

Enbridge President and CEO Greg Ebel said, “This quarter, we concluded the successful acquisition of the three U.S. natural gas utilities first announced in September 2023. The assets are a perfect fit within Enbridge's existing low-risk business model, offer reliable cash flow, and come with embedded quick-cycle growth opportunities. I am very proud of our team's commitment to execution and ongoing integration efforts and look forward to working with our new colleagues and stakeholders to deliver safe, reliable, affordable energy to over 7 million Gas Distribution customers in North America”.

Enbridge Inc. in October closed its acquisition of Public Service Company of North Carolina, Incorporated (PSNC) from Dominion Energy, Inc, marking the completion of Enbridge’s strategic acquisition announced in September 2023, where it entered into three separate definitive agreements with Dominion Energy Inc. to acquire natural gas distribution companies The East Ohio Gas Company, PSNC, and Questar Gas for an aggregate purchase price of $14 billion (CAD 19 billion), composed of $9.4 billion of cash consideration and $4.6 billion of assumed debt.

"Across the business, we saw strong utilization of our assets which drove another solid quarter of financial results, positioning us to achieve full-year guidance for the 19th year in a row. We expect to be near the top of our 2024 EBITDA range, and close to the mid-point of our original DCF per share guidance range,” Ebel continued.

“The macro-outlook for energy infrastructure demand and the value of incumbency has never been higher. Enbridge is uniquely positioned to take advantage of this opportunity and capitalize on future growth across the business. Electricity demand for data centers, natural gas demand for industrial growth and onshoring, and renewable power demand to help customers meet emissions targets are driving unprecedented customer conversations. In addition, domestic and international oil demand highlight the necessity of integrated infrastructure, and Enbridge is there to provide it. Together, our four core businesses provide a highly diversified and valuable portfolio for both customers and investors,” he said.

"In Liquids, demand for the Mainline remains strong and our volumes for 2024 are expected to exceed 3 million barrels per day. Growth in the Western Canadian Sedimentary Basin (WCSB) and the demand-pull nature of the system is driving discussions with customers for additional WCSB egress in 2026 and beyond. In the Permian, strong Gray Oak volumes continue to support high utilization at our state-of-the-art Ingleside crude export facility which saw single day and monthly average volume records during the quarter. We closed our previously announced acquisition of additional dock space and adjacent land to Ingleside and expect the transaction to unlock future low multiple optimization and expansion opportunities,” Ebel said.

Enbridge also recently announced it plans to build new oil and gas pipelines for BP Exploration & Production Company’s recently sanctioned Kaskida development in the U.S. Gulf of Mexico (GOM). Enbridge will build, own, and operate crude oil and natural gas pipelines in Kaskida, BP’s sixth hub in the GOM.

"In Gas Transmission, we sanctioned the construction of two new pipeline systems to support BP's Kaskida development in the Gulf of Mexico, which further extends our secured growth program in the latter half of the decade. We also enhanced our Permian gas value chain through the acquisition of an interest in highly contracted natural gas pipelines that are a key feeder system to the Whistler Pipeline and deliver critical energy to serve U.S. Gulf Coast demand. This announcement follows the in-service of ADCC Pipeline and sanctioning of Blackcomb Pipeline, demonstrating the strategic value and growth opportunities being unlocked through the Whistler Parent JV announced earlier this year,” Ebel said.

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