Canada’s energy infrastructure company, Enbridge Inc (NYSE:ENB), reported third-quarter profits that exceeded analyst expectations. The company also indicated its interest in pursuing smaller acquisitions while finalizing a $14 billion deal to acquire three U.S. gas utilities.
Enbridge’s transaction with Dominion Energy (NYSE:D) remains on track to close in 2024. In addition to this significant deal, the company has announced agreements to increase its stake in German offshore wind projects for 625 million euros ($668.7 million) and to purchase seven U.S. renewable natural gas facilities for $1.2 billion.
CEO Greg Ebel stated that Enbridge would selectively explore further acquisition opportunities, as long as the company maintains its target of a debt-to-EBITDA (earnings before interest, tax, debt, and amortization) ratio between 4.5 and 5 times. He added, “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 also mentioned that Enbridge has an available capacity of C$2.5 billion to C$3 billion ($1.83 billion to $2.19 billion) for tuck-in acquisitions.
Enbridge is known for operating the Mainline oil pipeline system, which transports a significant portion of Canada’s crude exports to the United States. The company reported higher earnings due to increased oil and liquid transportation volumes.
Low U.S. inventory levels and rising demand for alternatives to Russian oil, driven by Russia’s invasion of Ukraine last year, have led to increased crude exports and boosted profits for oil and gas transportation companies. Enbridge reported record utilization in its liquids business during the third quarter of 2023.
Core profits from the company’s liquids pipelines in the third quarter rose by 15.5% to C$2.25 billion compared to the previous year, with Mainline volumes increasing by more than 1% to 3 million barrels per day (bpd).
Enbridge reported an adjusted profit of 62 Canadian cents per share for the quarter ending on September 30, exceeding the average estimate of 60 Canadian cents per share according to LSEG data.
Enbridge’s shares saw a 0.3% increase on the Toronto Stock Exchange, reaching C$46.18.
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Author Faith Yakubu 
