Enbridge Reports Strong Second Quarter 2021 Financial Results and Advances Strategic Priorities
CALGARY, AB, July 30, 2021 – Enbridge Inc. (Enbridge or the Company) (TSX: ENB) (NYSE: ENB) today reported second quarter 2021 financial results, reaffirmed its 2021 financial outlook, and provided a mid-year business update.
(all financial figures are unaudited and in Canadian dollars unless otherwise noted)
- Second quarter GAAP earnings of $1.4 billion or $0.69 per common share, compared with GAAP earnings of $1.6 billion or $0.82 per common share in 2020
- Adjusted earnings of $1.4 billion or $0.67 per common share, compared with $1.1 billion or $0.56 per common share in 2020
- Adjusted earnings before interest, income taxes and depreciation and amortization (EBITDA) of $3.3 billion, compared with $3.3 billion in 2020
- Cash Provided by Operating Activities of $2.2 billion, compared with $2.4 billion in 2020
- Distributable Cash Flow (DCF) of $2.5 billion or $1.24 per common share, compared with $2.4 billion or $1.21 per common share in 2020
- Reaffirmed 2021 full year guidance range of EBITDA of $13.9 billion to $14.3 billion and DCF per share of $4.70 to $5.00
- Construction of the final leg of the U.S. Line 3 Replacement Project is progressing on schedule with an expected fourth quarter in-service date
- Placed initial phases of the $1.0 billion T-South Expansion and $0.5 billion Spruce Ridge projects into service; both projects expected to be fully in-service in the fourth quarter
- Announced collaboration with the Government of Ontario to expand natural gas access to rural, northern and Indigenous communities
- Announced development of Ridgeline Expansion Project in Tennessee to provide affordable and reliable natural gas power generation to displace higher carbon coal generation
- Advancing the US$2.1 billion multi-year Gas Transmission modernization program
- Announced plans to file a rate case on Texas Eastern with rates effective in early 2022, ensuring the system continues to earn an appropriate rate of return on invested capital
- Construction on three French offshore wind projects progressing well, which will collectively generate 1.4 GW (0.3 GW net) of renewable power once placed into service
- Continued development of solar self-power program in both Liquids Pipelines and Gas Transmission; 3 facilities in operation and 4 more under construction
- Announced the $1.14 billion sale of Enbridge’s interest in Noverco Inc. (Noverco), which is expected to close by early 2022, providing increased financial flexibility
- Received Moody’s upgrade to Baa1 for Enbridge Inc.; All four agencies’ ratings are BBB+, or equivalent, reflecting Enbridge’s sector leading financial strength and cash flow resiliency
- Published Enbridge’s 20th annual Sustainability Report and announced the first midstream sector sustainability-linked bond issuance of US$1.0 billion
Commenting on Enbridge’s second quarter operational performance and financial results, Al Monaco, President and CEO of Enbridge noted the following:
“Following a strong start to the year, our four franchises delivered solid financial performance in the second quarter, with good operating performance and high utilization across our systems. The global economic recovery is now well underway, and our assets have been essential in assuring access to reliable and affordable conventional and renewable energy throughout this critical period.
“Our performance in the first half of 2021 has set us up well for the full year. We’re on track to bring $10 billion of projects into service this year and we’re reaffirming our full year 2021 financial guidance. Our secured growth execution and embedded asset growth gives us confidence that we’ll generate 5-7% distributable cash flow growth through 2023, and we’re continuing to advance strategic priorities across each of our franchises.
“In Liquids Pipelines, nominations for July were robust, which highlights the strength of the markets we serve and the demand for our system capacity. As expected, lower mainline volumes in the second quarter reflected the planned maintenance of oil sands upgraders and downstream refineries, and are factored into our full year outlook of 2.8 mmbpd on average for 2021.
“Construction of the final leg of the Line 3 Replacement Project is progressing well and the project is on schedule. We are proud of the fact that Line 3 has provided significant business and employment to Indigenous companies and workers in both Canada and the U.S., and contributed over $750 million of spending with Indigenous and Tribal communities with over US$250 million of spending in Minnesota alone so far.
“With the Canadian, North Dakota and Wisconsin segments complete, and Minnesota construction progressing well, we expect Line 3 to be fully in service during the fourth quarter. Line 3 is, first and foremost, a critical integrity project that will improve safety and further reduce environmental risks, while driving significant incremental EBITDA growth once fully in service.
“During the quarter, we placed the 160 kbpd Woodland Pipeline Expansion Project into service to meet the needs of the Kearl oilsands project. This expansion is a great example of the ongoing executable, low-risk, solid return opportunities for growth in the Liquids business.
“In Gas Transmission, we are proud to be working with the Tennessee Valley Authority (TVA) on an opportunity that has the potential to provide affordable and cleaner energy for the utility’s customers. The potential expansion of the East Tennessee Natural Gas system, if selected, would supply natural gas to serve one of the power generation options that TVA is currently scoping to replace a coal-fired power plant in Northeast Tennessee. This is an exciting opportunity reflecting the vital role that natural gas is expected to play in displacing higher-carbon sources of power generation, while providing reliable and affordable energy to the people of Tennessee.
“We are also advancing the $0.5 billion Spruce Ridge and $1.0 billion T-South BC Pipeline expansion projects. We’ve completed and placed into service initial segments of each project, which remain on schedule to be fully in-service by the end of the year. More broadly, the execution of our 3-year, US$2.1 billion modernization program is also progressing well. And, we plan to file a rate case shortly so that we earn an appropriate return on our invested capital, including the modernization program.
“Our natural gas distribution utility also continues to see strong growth. We recently announced plans to expand access to natural gas to remote and Indigenous communities across Ontario. This joint effort with the Government of Ontario will provide reliable, low-cost access to lower carbon energy for consumers. And, we continue to advance construction of three renewable natural gas projects in Ontario to go along with the three currently in operation. Similarly, construction on our hydrogen blending facility in Markham, Ontario is on schedule.
“Construction of three offshore wind facilities off the coast of France is progressing well. Combined, these three projects will generate enough renewable energy to power over 1 million homes. And, through our offshore wind joint venture development company Maple Power, we continue to develop further opportunities in Europe that capitalize on our growing development, construction and operating capability. Finally, we’re continuing to progress our solar self-power strategy with three projects now in service and four more underway – another great example of how we’re lowering emissions and costs to generate shareholder value.
“Through strong cash flow growth and disciplined capital allocation, we continue to build financial flexibility to position Enbridge for the future. Our balance sheet is strong and we’re further enhancing it through the recently announced $1.14 billion divestment of our non-operating minority interest in Noverco. This was an excellent opportunity to monetize a non-strategic investment at a premium valuation.
“We’re pleased with our progress through the first half of 2021, having advanced our strategic priorities, including adding opportunities to the backlog. Our solid execution positions us well to achieve our three-year plan and helps to solidify our growth trajectory beyond 2023.
“Last month we published our 20th annual Sustainability Report, which highlights our long-standing focus on sustainable practices and our industry-leading performance across environmental, social and governance issues, including a 32% reduction in Scope 1 and 14% reduction in Scope 2 emissions between 2018 and 2020. We reinforced our commitments with the issuance of our first Sustainability-Linked Bond which ties our financial performance to the achievement of the ESG goals we set out in 2020.
“We believe that in all practical scenarios, our assets will remain critical to supporting long term energy demand. Existing infrastructure is going to play a key role in the transportation and storage of future energy supplies, ensuring affordable and reliable access to conventional and low-carbon energy.
“We’re leveraging our existing assets and working, along with our customers, to identify early stage investments in embedded low-carbon infrastructure opportunities across our businesses, while modernizing our assets to ensure we’re serving society’s energy needs for decades to come. Over the last two decades we’ve built a strong renewables platform and made early stage investments in renewable natural gas, hydrogen and compressed natural gas that will help us grow well into the future as a differentiated energy service provider.”
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