Enbridge Inc. (TSE:ENB, Mkt cap 48.48B, P/E 29.65, Div/yield 0.53/4.03, EPS 1.77, Shares 929.23M) has reported a drop in profit for the second quarter after wildfires in northeastern Alberta forced the Calgary-based pipeline company to cut production and temporarily close certain pipelines and terminal facilities.
Net income for the three months ended June 30, 2016 were $301m or 33 cents per share, down from $577m or 68 cents per share in the same quarter last year.
The wildfires in May 2016 were a significant reason for the decrease.
Reporting its quarterly results on Friday, Enbridge said it took longer than originally anticipated for oilsands production to resume. Average deliveries for May and June were down by approximately 255,000 barrels per day — 10% lower than just before the fires.
The results include a $12m after-tax expense for bringing pipelines and facilities back into service following the Alberta wildfires.
“We worked closely with our customers and by the end of May, the majority of our systems were operating normally,” said Al Monaco, president and CEO. “While the wildfires tempered a record start to the year, the impact was transitory and is not expected to have a lasting effect.”
Q2 profit was also affected by a C$103m after-tax impairment related to Enbridge’s 75% joint venture interest in Eddystone Rail, a rail-to-barge transloading facility in the greater Philadelphia, Pennsylvania area that delivers Bakken and other light sweet crude oil to Philadelphia area refineries. Demand for Eddystone Rail services has dropped significantly due to lower prices for the crude oil it handles.
Adjusted earnings were $456m or 50 cents per share, compared with $505m or 60 cents per share in the second quarter of 2015.
Enbridge Inc is a Calgary-based energy transportation and distribution company. 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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