Summary
Enbridge Inc. (ENB) reported its first quarter 2023 financial results, demonstrating resilience with solid operational performance across its key segments. While total operating revenues decreased year-over-year, primarily due to lower commodity sales, the company's core transportation and services revenue saw an increase, indicating sustained demand for its infrastructure. Earnings per share saw a slight decline compared to the prior year, impacted by significant non-cash items including foreign exchange hedge terminations and derivative fair value adjustments. The company achieved significant milestones, including reaching an agreement in principle for a new Mainline tolling settlement, which provides long-term rate stability. Enbridge also continued to execute its growth strategy through strategic acquisitions, such as Tres Palacios Holdings LLC, and announced a further acquisition of Aitken Creek Gas Storage. Strong cash flow from operations and robust liquidity position the company to fund its capital program and shareholder distributions.
Key Highlights
- 1Total operating revenues were $12.1 billion for Q1 2023, down from $15.1 billion in Q1 2022, largely due to a decrease in commodity sales.
- 2Earnings attributable to common shareholders were $1.73 billion, or $0.85 per diluted share, compared to $1.93 billion, or $0.95 per diluted share, in the prior year. The decrease was influenced by a $638 million realized loss from foreign exchange hedge terminations and other non-cash derivative adjustments.
- 3Agreement in principle reached on a new 7.5-year Mainline tolling settlement, providing rate certainty and expected to earn between 11% and 14.5% returns.
- 4Acquisition of Tres Palacios Holdings LLC, a natural gas storage facility, for US$335 million, enhancing its Gas Transmission and Midstream segment.
- 5Announced definitive agreement to acquire Aitken Creek Gas Storage facilities in British Columbia for $400 million.
- 6Liquids Pipelines segment EBITDA increased slightly to $2.36 billion, driven by higher ownership in Gray Oak and Cactus II pipelines and increased volumes on Flanagan South.
- 7Gas Transmission and Midstream segment EBITDA grew to $1.21 billion, benefiting from the Texas Eastern rate case settlement and a favorable exchange rate, partially offset by reduced interest in DCP.