Charges Line 9 pipeline delay hurt Enbridge’s bottom line

One-time charges and a delay in start-up of a pipeline to Eastern Canada took a toll on Enbridge Inc.’s (TSE:ENB, Mkt cap 44.33B, P/E 230.04, Div/yield 0.47/3.59, EPS 0.22, Shares 863.65M) earnings in the third quarter, resulting in a net loss of $609 million (US$463 million), or 72 cents a share, for the period.

Line 9 pipeline delay hurt Enbridge bottom line

Charges Line 9 pipeline delay hurt Enbridge’s bottom line

Excluding one-time items, per-share profit came in 3 cents short of the 50-cent prediction made by Bloomberg analysts, the Financial Post reports.

The financials are also considerably weaker than the $80 million loss, or 10 cents, posted 12 months ago. The $529-million back-step is attributed to Enbridge having spent the last three months transferring assets to affiliates such as Enbridge Income Fund Holdings Inc. which contributed to $351 million in costs in the quarter.

In addition, $654 million of its earnings has been absorbed by one-time expenses related to changes in the value of derivatives. Meanwhile, the almost 12-mnoth delay of the reversal of Line 9, running from southern Ontario to Quebec, also contributed to lower adjusted earnings.

Canada’s largest pipeline company aims to spend $38 billion through 2019 on new projects including liquids and natural gas lines, as well as power generation and gas processing.

“Demand for pipeline capacity has been strong and the scalable and flexible nature of our liquids mainline has enabled us to increase throughput,” chief executive officer Al Monaco said in the statement.

Monaco also told investors last month that Enbridge will focus on expanding “low-cost, incremental” projects like pairing-up existing pipelines to provide producers with new transportation capacity as they grapple with low crude prices. The company’s $7.5-billion Line 3 replacement is the largest project.

Enbridge Inc. is a Canadian energy transportation and distribution company based in Calgary, Alberta. The Company operates in five segments: Liquids Pipelines; Gas Distribution; Gas Pipelines, Processing and Energy Services; Sponsored Investments, and Corporate. Liquids Pipelines segment owns and operates crude oil and other liquid hydrocarbons pipelines and terminals. Gas Distribution consists of the Company’s natural gas utility operations. Gas Pipelines, Processing and Energy Services segment consists of investments in natural gas pipelines, gathering and processing facilities and the Company’s energy services businesses, along with renewable energy and transmission facilities. Sponsored Investments includes the Company’s 33.7% economic interest in Enbridge Energy Partners, L.P. (EEP), and Enbridge’s interests in both the Eastern Access and Lakehead System Mainline expansion projects held through Enbridge Energy, Limited Partnership (EELP). The Corporate segment includes an investment in Noverco Inc. More from Reuters »

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