Enbridge Inc (ENB, Financial), a leading North American energy infrastructure company, reported its second quarter 2024 financial results, recast its 2024 financial guidance, and provided a quarterly business update. The company owns extensive midstream assets that transport hydrocarbons across the US and Canada, including the Canadian Mainline system, regional oil sands pipelines, and natural gas pipelines. Enbridge also operates a regulated natural gas utility and Canada's largest natural gas distribution company, with a small renewables portfolio focused on wind projects.
Performance and Challenges
Enbridge Inc (ENB, Financial) reported GAAP earnings of $1.8 billion or $0.86 per common share for Q2 2024, consistent with the same period in 2023. However, adjusted earnings decreased to $1.2 billion or $0.58 per common share, down from $1.4 billion or $0.68 per common share in Q2 2023. This decline was primarily due to higher financing costs, increased income taxes, and higher depreciation expenses.
Despite these challenges, the company achieved an 8% increase in adjusted EBITDA, reaching $4.3 billion compared to $4.0 billion in the previous year. Cash provided by operating activities was $2.8 billion, down from $3.4 billion in Q2 2023, while distributable cash flow (DCF) increased by 3% to $2.9 billion.
Financial Achievements
Enbridge Inc (ENB, Financial) made significant progress on its strategic priorities, including the acquisition of Questar Gas Company and Wexpro, which closed on May 31, 2024, for US$4.3 billion. The company also announced the Final Investment Decision (FID) of the Blackcomb Pipeline and sanctioned the Orange Grove solar farm project.
CEO Greg Ebel commented:
“During the quarter, we made significant progress on our strategic priorities. We completed the acquisition of Questar and filed a settlement with the Public Staff for the North Carolina Utilities Commission giving us a clear path to closing the acquisition of PSNC in Q3. In addition, we completed all the remaining financing for the Acquisitions and discontinued the company's at-the-market equity issuance program. As such, we are recasting our 2024 financial outlook to include contributions from the acquired assets. I’m proud of our team’s commitment to execution and look forward to working with our new team members and customers.”
Income Statement Highlights
| Three months ended June 30, | 2024 | 2023 |
|---|---|---|
| GAAP Earnings attributable to common shareholders | $1,848 million | $1,848 million |
| GAAP Earnings per common share | $0.86 | $0.91 |
| Cash provided by operating activities | $2,814 million | $3,439 million |
| Adjusted EBITDA | $4,335 million | $4,008 million |
| Adjusted Earnings | $1,248 million | $1,380 million |
| Adjusted Earnings per common share | $0.58 | $0.68 |
| Distributable Cash Flow | $2,858 million | $2,783 million |
Analysis
Enbridge Inc (ENB, Financial)'s performance in Q2 2024 reflects both strengths and challenges. The company's ability to maintain GAAP earnings while increasing adjusted EBITDA and DCF demonstrates resilience in its core operations. However, the decline in adjusted earnings per share highlights the impact of higher financing costs and increased depreciation expenses.
The strategic acquisitions and project sanctions indicate Enbridge's commitment to growth and diversification. The recast financial guidance, with an increased adjusted EBITDA range of $17.7 billion to $18.3 billion, underscores the anticipated positive impact of these acquisitions.
Overall, Enbridge Inc (ENB, Financial) continues to navigate a complex financial landscape, balancing growth initiatives with the challenges of higher costs and market fluctuations. Investors will be keen to monitor the company's progress in integrating new assets and achieving its financial targets for the remainder of 2024.
Explore the complete 8-K earnings release (here) from Enbridge Inc for further details.
