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UPDATE 1-Enbridge expects adjusted profit to rise on Spectra deal

Published 2017-05-11, 07:49 a/m
© Reuters.  UPDATE 1-Enbridge expects adjusted profit to rise on Spectra deal
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May 11 (Reuters) - Enbridge Inc ENB.TO ENB.N , Canada's largest pipeline company, forecast a big rise in adjusted earnings before interest and taxes this year, following its acquisition of smaller rival Spectra Energy Corp (F:SEP).

Enbridge said last September it would buy Spectra, then valued at $28 billion, to create the largest energy infrastructure company in North America.

The deal, which closed on Feb.27, highlighted the pressure on pipeline companies to merge as they grapple with over-capacity and sliding tariffs.

Calgary, Alberta-based Enbridge, which reported a lower-than-expected profit on Thursday, said it expects adjusted profit before interest and taxes of C$7.2 billion ($5.25 billion) to C$7.6 billion in 2017, much higher than the C$4.7 billion it earned last year.

However, the company said it expects available cash flow from operations to fall to C$3.60 to C$3.90 per share this year, from C$4.08 per share in 2016.

Weak earnings from Enbridge's liquids pipeline business weighed on profit in the first quarter ended March 31.

Adjusted earnings in the unit fell 10 percent to C$970 million in the quarter. earnings attributable to shareholders fell 47 percent to C$638 million, or 54 Canadian cents per share.

Excluding a C$416 million derivative gain and other one-time items, adjusted profit was 57 Canadian cents. The analysts' average estimate was 62 Canadian cents, according to Thomson Reuters I/B/E/S.

($1 = 1.3710 Canadian dollars)

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