CALGARY, AB, Dec. 8, 2020 /CNW/ - Enbridge Inc. (Enbridge
or the Company) (TSX: ENB) (NYSE: ENB) announced its 2021 financial
guidance and dividend and provided an update on its strategic
priorities, which will be further discussed at the Company's
virtual investor conference today.
Highlights
- Re-affirmation of 5-7% average long-term annual distributable
cash flow (DCF) per share growth outlook, based on an equity
self-funded model
- The Company expects full-year 2020 DCF per share to be near the
mid-point of the $4.50 to
$4.80 guidance range
- Announced 2021 Financial Guidance: 2021 projected DCF per share
of $4.70 to $5.00, and earnings before interest, taxes,
depreciation and amortization (EBITDA) of $13.9 to $14.3
billion
- The Company declared its 26th consecutive annual
common share dividend increase, raising it by 3% to $0.835/quarter ($3.34 annually), effective March 1, 2021
- Execution of the Company's $16
billion secured growth capital program continues to advance,
generating approximately $2 billion
of expected EBITDA growth from 2021 to 2023
- Construction has commenced on the remaining Minnesota leg of the U.S. Line 3 Replacement
project
- Weymouth compressor was
approved by regulators on November 25
to commence operations, completing the U.S.$0.1 billion Atlantic Bridge project, which
provides expanded gas supply into New England and the
Maritimes
CEO Comment
Commenting on the Company's operations, strategic priorities and
outlook, Al Monaco, President and
CEO of Enbridge, noted the following:
"Over the past year, the energy industry has faced unparalleled
challenges. While our business has not been immune, we've proven
again that our low-risk commercial model generates resilient cash
flows in all market conditions. Our infrastructure is in high
demand and is essential to North
America's economy, and we're confident that it will be for
many decades.
"We responded quickly to protect the health and safety of our
people and to ensure critical operations were maintained. The
criticality of what we do means that the safety and reliability of
our systems is the single most important priority for everyone at
Enbridge.
"As we look forward in this year's Strategic Plan, it's clear
that long-term global energy demand will continue to grow, and that
all forms of energy supply – conventional and renewable – will be
needed to meet that demand. Our scale, financial strength, and
asset footprint across each of our businesses – Gas Transmission,
Gas Distribution and Storage, Liquids Pipelines and Renewable Power
– provide competitive advantages that assure the resiliency and
longevity of our cash flows and will generate attractive long-term
growth.
"For the 26th consecutive year, we're pleased to be providing
our shareholders with another dividend increase in 2021. This
reflects our confidence in our healthy 5-7% DCF per share growth
outlook, on average, through 2023 and beyond, the priority we place
on returning capital to shareholders, and our strong financial
position. We'll continue to ratably grow the dividend up to the
level of average annual DCF per share growth, while maintaining our
dividend policy payout of 60-70% of distributable cash
flow.
"We're highly confident in the durability of our businesses and
that they will generate profitable investment opportunities. Part
of that is continuing to position for the gradual transition toward
lower carbon intensity, over time. We began doing that more than 20
years ago with investments in natural gas and renewable power,
which today provide leading platforms for lower carbon
infrastructure growth. We're also investing in renewable natural
gas and hydrogen facilities with commercial models that fit our
low-risk pipeline-utility model.
"In the near-term, our Plan continues to prioritize the
execution of our $16 billion secured
growth program, of which approximately $6
billion has already been spent, and are expected to deliver
approximately $2 billion of
incremental EBITDA from 2021 to 2023.
"The Line 3 Replacement project is an important element of that
program. We recently completed a very thorough regulatory and
permitting process in Minnesota
that lasted 6 years. The majority of the line is in place and we've
now started construction on the final leg in Minnesota. Our top priority will be to protect
communities and the environment. We are very proud to have
overwhelming community support for the project.
"We'll be laser-focused on maximizing the returns on our base
business by realizing embedded revenue growth and generating
productivity improvements through the use of new technology. Our
two technology and innovation labs, for example, are already
helping our businesses enable significant revenue and cost
efficiencies.
"Over the medium and longer term, Enbridge's diversified asset
base, integrated infrastructure networks and extensive reach
provide us with many opportunities to invest our expected post-
Line 3 annual investment capacity of $5-6 billion. We will, however, stay true to our
investment discipline, deploy capital to the best uses, and stick
to what we know best.
"That means prioritizing low-capital intensity growth and
regulated utility or utility-like investments. Longer term, we will
continue to develop our organic hopper; however, long-lead time
opportunities will compete for excess financial capacity with
alternatives, including share buybacks, to ensure shareholder value
is maximized.
"Collectively, execution on these elements of our Plan are
expected to drive 5-7% distributable cash flow per share growth
through 2023 and beyond.
"Sustainability is integral to our ability to safely and
reliably deliver the energy people need and want. While ESG has
gained broader attention recently, we've always operated our
business sustainably and we're proud to be recognized as an ESG
leader. Our recent further commitments to emissions reduction and
diversity are a good example of that.
"We believe that our Plan continues to provide investors with a
compelling and superior total shareholder return value proposition,
which is why the management team and our employees continue to
invest in ENB."
Strategic Priorities and Three-Year Financial Outlook
Last year, Enbridge set out a strategic plan that emphasized
maintaining resiliency and prudently growing its world-class energy
infrastructure franchises, while preserving its financial strength
and flexibility. The rapid rise of the Covid-19 pandemic in early
2020 and the unparalleled impact on energy supply and demand
re-tested the resilience of the business.
Despite the disruption to energy markets, the strategic
positioning of the Company's assets and last mile connections to
North America's largest
industrial, commercial and end-use markets, combined with
Enbridge's low-risk business model, have continued to generate
consistent and predictable cash flows. Furthermore, precautionary
measures were initiated early to further bolster the Company's
financial flexibility and to mitigate the financial impacts of the
pandemic through prudent cost reductions.
As a result, Enbridge is even stronger today and is projected to
achieve the mid-point of its 2020 financial guidance as set out in
December 2019, further demonstrating
its resilience.
The Company's 2021 Strategic Plan builds on this strength and
emphasizes priorities that will continue to reinforce the
resilience, longevity and organic growth of its cash flows over the
long-term. Specific priorities include:
- Ensure safe and reliable operations and provision of effective
and cost-efficient transportation solutions for its
customers
- Execute the $16 billion
secured growth capital program, including completion of the U.S.
segment of the Line 3 Replacement project
- Maximize returns on the base business through embedded revenue
growth, productivity enhancements and the application of technology
to drive efficiency and improve returns
- Grow core businesses through low capital intensity and
utility-like investments, disciplined capital allocation, and
preservation of balance sheet strength and flexibility
2021 Financial Outlook
Enbridge is providing 2021 guidance for EBITDA of $13.9 billion to $14.3
billion and distributable cash flow per share (DCF/share) of
between $4.70 to $5.00 per share.
Performance drivers in 2021 include volume recoveries
on Enbridge's Liquids Mainline System and downstream
pipelines; continued customer growth within its Gas
Distribution & Storage business; rate increases on its Gas
Transmission and Midstream systems; further cost savings; and
contributions from projects entering service.
Separately, Enbridge announced that the quarterly dividend for
2021 will be increased from $0.81
to $0.835 per share, commencing with the dividend payable
on March 1, 2021, to shareholders of record on February
12, 2021.
Business Updates
Line 3 Replacement
On December 1, Enbridge commenced
construction on the Line 3 Replacement Project (the "Project") in
Minnesota, after having satisfied
all necessary regulatory and permitting requirements at the state
and federal levels. Appropriate measures have been put in place to
ensure the health and safety of Enbridge's workforce and the
communities along the right of way.
The US$2.9 billion project is a critical integrity project
that will enhance the continued safe and reliable operations
of the Company's Mainline System well into the future,
reflecting Enbridge's commitment to protecting the environment.
It will provide significant economic benefits for counties,
small businesses, Native American communities, and union members –
bringing 4,200 family-sustaining, mostly local construction jobs,
millions of dollars in local spending and additional tax revenues
at a time when Northern Minnesota
needs it most.
The Company anticipates that the Project will be in service in
the fourth quarter of 2021. The Company will provide an update on
project costs in early 2021.
Atlantic Bridge
Regulators have approved the Weymouth Compressor Station, the
final component of the US$0.1 billion
Atlantic Bridge Project, to start operations.
The Atlantic Bridge Project will enable the transport of
significant and diverse natural gas supplies to end use markets in
the New England states and Canadian Maritime provinces. This
expanded access to reliable and affordable natural gas throughout
the region will support energy cost savings for homeowners,
businesses, and manufacturers.
Details of Enbridge's Investor Conference
Enbridge's virtual investor conference will be held today at
7:00 a.m. MT (9:00 a.m. ET). The conference will be
webcast live at Link.
Details of the webcast:
When:
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Tuesday Dec. 8,
2020
|
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7:00 a.m. MT (9:00
a.m. ET) to 10:30 a.m. MT (12:30 p.m. ET)
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Webcast:
|
Sign-up
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Call:
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Dial-in (Audio only –
please dial in 10 minutes ahead):
|
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North America Toll
Free: (833) 350-1337
|
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Participant Passcode:
9994862
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Presentations and supporting materials are posted on Enbridge's
website in 'Events and Presentations'.
A webcast replay will be available approximately two hours after
the conclusion of the event and a transcript will be posted to
Enbridge's website approximately 24 hours after the
event.
About Enbridge Inc.
Enbridge Inc. is a leading North American energy
infrastructure company. We safely and reliably deliver the energy
people need and want to fuel quality of life. Our core businesses
include Liquids Pipelines, which transports approximately 25
percent of the crude oil produced in North America; Gas Transmission and Midstream,
which transports approximately 20 percent of the natural gas
consumed in the U.S.; and Utilities and Power Operations, which
serves approximately 3.7 million retail customers in Ontario and Quebec, and generates approximately 1,750 MW
of net renewable power in North
America and Europe. The
Company's common shares trade on the Toronto and New
York stock exchanges under the symbol ENB. For more
information, visit www.enbridge.com.
Forward-Looking Information
Forward-looking information, or forward-looking statements,
have been included in this news release to provide information
about Enbridge and its subsidiaries and affiliates, including
management's assessment of Enbridge and its subsidiaries' future
plans and operations. This information may not be appropriate for
other purposes. Forward-looking statements are typically identified
by words such as ''anticipate'', ''expect'', ''project'',
''estimate'', ''forecast'', ''plan'', ''intend'', ''target'',
''believe'', "likely" and similar words suggesting future outcomes
or statements regarding an outlook. Forward-looking information or
statements included or incorporated by reference in this document
include, but are not limited to, statements with respect to the
following: Enbridge's strategic plan, priorities and outlook; 2020
and 2021 financial guidance, including projected DCF per share and
EBITDA and expected growth thereof; expected dividends, dividend
growth and dividend policy; expected supply of, demand for and
prices of crude oil, natural gas, natural gas liquids, liquified
natural gas and renewable energy; expected energy transition to
lower carbon intensity; emissions reduction targets; diversity and
inclusion goals; anticipated utilization of our existing assets,
including throughput on the Mainline; expected EBITDA; expected DCF
and DCF per share; expected future cash flows; expected shareholder
returns; expected performance of the Company's businesses,
including customer growth; financial strength and flexibility;
expectations on sources of liquidity and sufficiency of financial
resources; expected costs related to announced projects and
projects under construction; expected in-service dates for
announced projects and projects under construction, and the
contributions of such projects; expected capital expenditures and
capital allocation priorities; anticipated cost savings; expected
future growth and investment opportunities, including secured
growth program; expected use of new technology and the benefits
thereof; expected future actions of regulators and courts; toll and
rate case filings, and the anticipated benefits therefrom; the Line
3 Replacement Project; and the Atlantic Bridge Project.
Although Enbridge believes these forward-looking statements
are reasonable based on the information available on the date such
statements are made and processes used to prepare the information,
such statements are not guarantees of future performance and
readers are cautioned against placing undue reliance on
forward-looking statements. By their nature, these statements
involve a variety of assumptions, known and unknown risks and
uncertainties and other factors, which may cause actual results,
levels of activity and achievements to differ materially from those
expressed or implied by such statements. Material assumptions
include assumptions about the following: the COVID-19 pandemic and
the duration and impact thereof; the expected supply of and demand
for crude oil, natural gas, natural gas liquids (NGL) and renewable
energy; prices of crude oil, natural gas, NGL and renewable energy,
including the current weakness and volatility of such prices;
expected energy transition; anticipated utilization of our existing
assets; anticipated cost savings; exchange rates; inflation;
interest rates; availability and price of labour and construction
materials; operational reliability; customer and regulatory
approvals; maintenance of support and regulatory approvals for the
Company's projects; anticipated in-service dates; weather; the
timing and closing of acquisitions and dispositions; the
realization of anticipated benefits and synergies of transactions;
governmental legislation; litigation; impact of the Company's
dividend policy on its future cash flows; credit ratings; capital
project funding; hedging program; expected EBITDA and expected
adjusted EBITDA; expected earnings/(loss) and adjusted
earnings/(loss); expected earnings/ (loss) or adjusted
earnings/(loss) per share; expected future cash flows and expected
future DCF and DCF per share; and estimated future dividends.
Assumptions regarding the expected supply of and demand for crude
oil, natural gas, NGL and renewable energy, and the prices of these
commodities, are material to and underlie all forward-looking
statements, as they may impact current and future levels of demand
for the Company's services. Similarly, exchange rates, inflation,
interest rates and the COVID-19 pandemic impact the economies and
business environments in which the Company operates and may impact
levels of demand for the Company's services and cost of inputs, and
are therefore inherent in all forward-looking statements. Due to
the interdependencies and correlation of these macroeconomic
factors, the impact of any one assumption on a forward-looking
statement cannot be determined with certainty, particularly with
respect to expected EBITDA, expected adjusted EBITDA, expected
earnings/(loss), expected adjusted earnings/(loss), expected DCF
and associated per share amounts, and estimated future dividends.
The most relevant assumptions associated with forward-looking
statements regarding announced projects and projects under
construction, including estimated completion dates and expected
capital expenditures, include the following: the availability and
price of labour and construction materials; the effects of
inflation and foreign exchange rates on labour and material costs;
the effects of interest rates on borrowing costs; the impact of
weather and customer, government and regulatory approvals on
construction and in-service schedules and cost recovery regimes;
and the COVID-19 pandemic and the duration and impact
thereof.
Enbridge's forward-looking statements are subject to risks
and uncertainties pertaining to the realization of anticipated
benefits and synergies of projects and transactions, successful
execution of our strategic plan and priorities, operating
performance, the Company's dividend policy, regulatory parameters,
changes in regulations applicable to the Company's business,
litigation, acquisitions and dispositions and other transactions,
project approval and support, renewals of rights-of-way, weather,
economic and competitive conditions, public opinion, changes in tax
laws and tax rates, changes in trade agreements, political
decisions, exchange rates, interest rates, commodity prices, supply
of and demand for commodities and the COVID-19 pandemic, including
but not limited to those risks and uncertainties discussed in this
and in the Company's other filings with Canadian and United States securities regulators. The
impact of any one risk, uncertainty or factor on a particular
forward-looking statement is not determinable with certainty as
these are interdependent and Enbridge's future course of action
depends on management's assessment of all information available at
the relevant time. Except to the extent required by applicable law,
Enbridge assumes no obligation to publicly update or revise any
forward-looking statements made in this news release or otherwise,
whether as a result of new information, future events or otherwise.
All forward-looking statements, whether written or oral,
attributable to Enbridge or persons acting on the Company's behalf,
are expressly qualified in their entirety by these cautionary
statements.
Non-GAAP Measures
This news release makes reference to non-GAAP measures,
including distributable cash flow (DCF) and DCF per share. DCF is
defined as cash flow provided by operating activities before the
impact of changes in operating assets and liabilities (including
changes in environmental liabilities) less distributions to
non-controlling interests and redeemable non-controlling interests,
preference share dividends and maintenance capital expenditures,
and further adjusted for unusual, non-recurring or non-operating
factors. Management uses DCF to assess performance of the Company
and to set its dividend payout target. Management believes the
presentation of these measures gives useful information to
investors and shareholders as they provide increased transparency
and insight into the performance of the Company.
Reconciliations of forward-looking non-GAAP financial
measures to comparable GAAP measures are not available due to the
challenges and impracticability with estimating some of the items,
particularly certain contingent liabilities and non-cash unrealized
derivative fair value losses and gains which are subject to market
variability. Because of those challenges, a reconciliation of
forward-looking non-GAAP financial measures is not available
without unreasonable effort.
The non-GAAP measures described above are not measures that
have a standardized meaning prescribed by generally accepted
accounting principles in the United
States of America (U.S. GAAP) and are not U.S. GAAP
measures. Therefore, these measures may not be comparable with
similar measures presented by other issuers. A reconciliation of
historical non-GAAP measures to the most directly comparable GAAP
measures is available on the Company's website. Additional
information on non-GAAP measures may be found on the Company's
website, www.sedar.com or www.sec.gov.
FOR FURTHER INFORMATION PLEASE CONTACT:
Media
|
Investment
Community
|
Jesse
Semko
|
Jonathan
Morgan
|
Toll Free: (888)
992-0997
|
Toll Free: (800)
481-2804
|
Email:
media@enbridge.com
|
Email: investor.relations@enbridge.com
|
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SOURCE Enbridge Inc.