Canada’s Enbridge Beats Profit Targets, Eyes Tuck-in Acquisitions

The logo of Calgary-based Enbridge, one of North America’s largest energy infrastructure companies, is displayed during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023.

Nov 3 (Reuters) – Canada energy infrastructure company Enbridge Inc on Friday reported third-quarter profit that topped analysts’ estimates and said it sees further opportunities for smaller acquisitions even as it finalizes a $14 billion deal to buy three U.S. gas utilities.

Calgary-based Enbridge said the transaction with Dominion Energy was on track to close in 2024. The company also announced deals to increase its stake in German offshore wind projects for 625 million euros ($668.7 million) and buy seven U.S. renewable natural gas facilities for $1.2 billion.

CEO Greg Ebel said Enbridge would look selectively at further acquisition opportunities, as long the company stayed within its 4.5 to 5 times debt to EBITDA (earnings before interest, tax, debt and amortization) target.

“I don’t see us doing any major M&A here as we bring in the three utilities in the United States… but we see a lot of stuff,” Ebel said.

Ebel said Enbridge has C$2.5 billion to C$3 billion ($1.83 billion to $2.19 billion) of available capacity for tuck-in acquisitions.

Enbridge operates the Mainline oil pipeline system, which ships the bulk of Canada’s crude exports to the United States. It reported an increase in earnings after transporting higher volumes of oil and other liquids.

Low U.S. inventory levels and increased exports as buyers sought alternatives to Russian oil since Russia’s invasion of Ukraine last year have boosted demand for crude, lifting profits for oil and gas transportation companies.

The company said its liquids business saw record utilization in the third quarter of 2023.

Quarterly core profit from company’s liquids pipelines rose 15.5% to C$2.25 billion from a year earlier, helped by a more than 1% rise in Mainline volumes to 3 million barrels per day (bpd).

The company posted an adjusted profit of 62 Canadian cents per share for the quarter ended Sept. 30, compared with the average estimate of 60 Canadian cents per share, according to LSEG data.

Enbridge shares were up 0.3% on the Toronto Stock Exchange at C$46.18.

($1 = 1.3735 Canadian dollars)

($1 = 0.9346 euros)

($1 = 1.3670 Canadian dollars)

Reporting by Nia Williams in British Columbia and Tanay Dhumal in Bengaluru; Editing by Shinjini Ganguli and Bill Berkrot