Financial strength reflects performance across all Enbridge core businesses in second quarter
Growth continues to be the word across the board for Enbridge, according to the company's financial results through the second quarter of 2018. With $7 billion in new projects scheduled to come into service in 2018, and the company's Line 3 project moving forward, company executives are expecting that strength to continue.
"We're very pleased with our strong financial results this quarter and the year is shaping up well," commented Al Monaco, President and Chief Executive Officer of Enbridge. "The results reflect strong operational performance across all of our core businesses, including the Liquids Mainline System where we moved record average volumes. We're also seeing increasing cash flow from the more than $12 billion of new projects brought into service over the past year. The solid financial performance and diversity of growth from our recently acquired natural gas transmission and utility businesses, together with the continued realization of cost synergies, is clearly proving out the value of the Spectra Energy acquisition completed last year. At the mid-point of the year, we remain confident in achieving our financial guidance for 2018, and we now expect to be in the top half of our DCF per share guidance range.
"We're equally pleased with the progress we've made on our strategic priorities since we announced the post-acquisition long range strategic plan last November. In the past three months alone we've entered into agreements to sell or monetize $7.5 billion in non-core assets at strong valuations, which more than doubles our original plan target of $3 billion. In addition, we've made significant progress on accelerating de-leveraging of our balance sheet and we've announced the intention to simplify our corporate structure. Proposals have been delivered to the Boards of our Sponsored Vehicles to purchase all of the outstanding public ownership in each. These proposed transactions would bring in all of the core assets under one publicly traded vehicle, Enbridge Inc., with greater diversification, increased trading liquidity, an enhanced credit profile and greater transparency of cash flows.
"Execution of our $22 billion secured capital program is also nicely on track. With the Minnesota PUC approval of the Certificate of Need and Route Permit on the Line 3 Replacement Project, we reached a critical milestone for Enbridge and our customers, and we remain on track with cost and schedule. Our $7 billion slate of 2018 projects are also advancing as planned, with the Valley Crossing and Nexus gas transmission lines due to come into service in the second half of the year.
"In summary, it was a busy and productive quarter. We continue to deliver strong and reliable operating and financial performance from the base businesses and we're executing on the strategic priorities that will position Enbridge for success going forward. We believe that these actions will surface significant value from what we see as the premium energy infrastructure assets in North America," concluded Mr. Monaco.
(all financial figures are unaudited and in Canadian dollars unless otherwise noted)
- GAAP earnings were $1,071 million or $0.63 per common share for the second quarter, compared to $919 million or $0.56 per common share in the second quarter of 2017, both including the impact of a number of unusual, non-recurring or non-operating factors
- Adjusted earnings were $1,094 million or $0.65 per common share for the second quarter, compared to $662 million or $0.41 per common share in the second quarter of 2017
- Adjusted earnings before interest, income tax and depreciation and amortization (EBITDA) were $3,165 million for the second quarter, compared to $2,581 million in the second quarter of 2017
- Cash Provided by Operating Activities was $3,344 million for the second quarter, compared to $1,971 million for the second quarter of 2017
- Distributable Cash Flow (DCF) was $1,858 million for the second quarter, compared to $1,324 million for the second quarter of 2017
- On track to achieve financial guidance for 2018, with outlook for DCF per share expected to be in the upper half of the guidance range of $4.15 to $4.45 per share
- Continued strong operational performance across all business segments, including another quarter of record average throughput on the Liquids Mainline System
- Approximately $7 billion of new projects on track to come into service in 2018, $1.6 billion of which have been brought into service year to date, including the Rampion U.K. offshore wind farm which had all turbines operational in the second quarter
- Minnesota Public Utilities Commission (MPUC) voted in favor of the issuance of the Certificate of Need and Route Permit for the Line 3 Replacement Project; construction well underway in Canada and is now complete in Wisconsin
- Agreements announced to sell $7.5 billion of non-core assets, significantly above the Company's original target of $3 billion for 2018, which will accelerate de-leveraging, provide increased financial flexibility and further focus the Company on its low-risk pipeline and utility businesses
- Proposals to the Boards of Enbridge's Sponsored Vehicles to acquire, in separate combination transactions, all of the outstanding equity securities not already beneficially owned by Enbridge