CALGARY – Enbridge Inc. (Enbridge or the Company) (TSX:ENB)(NYSE:ENB) announced its 2020 dividend and financial guidance and provided an update on its strategic priorities, which will be further discussed at the Company’s investor conference today in New York.
- A 9.8% increase in the Company’s common share dividend to $0.81/quarter ($3.24 annually), effective March 1, 2020.
- Updated 2020 financial guidance: EBITDA of approximately $13.7 billion; DCF per share of $4.50 to $4.80 per share
- Re-affirmation of 5%-7% average long term annual DCF per share growth outlook, based on an equity self-funded model
- Advancement of Liquids Pipelines U.S. Gulf Coast integrated value chain strategy
- Canadian segment of the Line 3 Replacement project placed into service
- Additional spill modelling work on Line 3 Replacement project completed; revised Final Environmental Impact Statement (FEIS) submitted to Minnesota Public Utilities Commission (MPUC)
- Regulatory application for Liquids Mainline contracting expected to be filed before year-end
In 2019, Enbridge successfully completed the 3-year strategic plan it set out following the acquisition of Spectra Energy in early 2017. Since the acquisition, the Company has fully integrated the Spectra assets, streamlined its business portfolio through $8 billion of non-core asset sales, substantially simplified its corporate structure through the buy-in of four sponsored vehicles, and significantly enhanced its financial strength and flexibility, all while continuing to deliver solid operating and financial performance. Today, Enbridge’s low risk profile, diversified business mix and strategically located assets generate highly reliable cash flows and the Company is well positioned for continued growth.
In its 2020 Strategic Plan, the Company is focused on maintaining resilience and prudently growing its three world-class core franchises: Liquids Pipelines, Gas Transmission, and Gas Distribution and Storage. Specific priorities include:
- Ensuring safe and reliable operations and provision of effective and cost-efficient transportation solutions for customers
- Enhance the business through asset optimization, cost efficiencies and low-risk growth
- Executing on $11 billion secured growth capital program, including the U.S. segment of the Line 3 Replacement project
- Growing core businesses through capital efficient organic growth, disciplined capital allocation, and preservation of balance sheet strength and flexibility
Commenting on the strategic plan, Al Monaco, President and CEO of Enbridge noted: “Our assets are essential to meeting North America’s standard of living and economic growth. With the significant repositioning of the Company now complete following the Spectra transaction, our asset base and low risk business model position us very well for the future.
“While we make changes to our plans and priorities to adapt to the business environment, one thing that will always stay the same is our focus on the safety and reliability of our systems – this is the single most important priority for everyone at Enbridge.
“In the near term, our emphasis will be on capital efficient in-franchise growth and executing our secured capital projects. We’ll continue to maximize operational and financial performance to provide unique value to our customers. Over the medium to longer term, Enbridge’s diversified asset base, integrated infrastructure networks and extensive reach provide us with many opportunities to extend growth. Post 2020, we expect embedded growth and new organic opportunities to generate annual DCF/share growth of 5-7%, on average, within a self-funded model.
“We will maintain a disciplined approach to capital allocation. Our near-term priorities on that front are unchanged, as we focus on preserving our strong balance sheet, returning capital to shareholders through our dividend and executing on low risk, capital efficient organic growth opportunities.
“For the last 25 years, we’ve reliably grown the business and returned capital to shareholders through our dividend, which has consistently grown by 11% annually on average over this time frame. We are pleased to be providing our shareholders with another strong dividend increase for 2020, which reflects the strength of our business, our confidence in the future and our ability to meet the needs of our customers during both attractive and challenging commodity cycles and industry conditions.”
2020 Financial Outlook
Enbridge provided updated guidance for earnings before interest, taxes, depreciation and amortization (EBITDA) for 2020 of approximately $13.7 billion and an updated guidance range of distributable cash flow per share (DCF/share) for 2020 of $4.50 to $4.80 per share.
Separately, Enbridge announced that the quarterly dividend for 2020 will be increased by 9.8% to $0.81 per share, commencing with the dividend payable on March 1, 2020, to shareholders of record on February 14, 2020.
Business Development Updates
Liquids USGC Strategy
Yesterday, Enbridge announced a letter of intent with Enterprise Products Partners L.P. to jointly develop the U.S. Gulf Coast (USGC) deep-water Sea Port Oil Terminal export facility capable of fully loading Very Large Crude Carriers, subject to the facility receiving a deep-water port license. In addition, Enbridge will advance the development of the Jones Creek Crude Oil Terminal, which will be fully integrated with the Seaway pipeline system and will provide connectivity to local refineries as well as export facilities. In addition to already announced plans to consider an expansion of the Seaway system, these initiatives represent a significant step in Enbridge’s USGC strategy to provide customers with enhanced flexibility and last mile connectivity for light and heavy crude shipments to export markets and local refineries.
Line 3 Replacement
On December 1, Enbridge began service on the Canadian segment of the Line 3 Replacement project. This will enhance the safety and reliability of the system in Canada while providing additional Mainline flexibility.
On December 9, the MPUC advised that the Minnesota Department of Commerce has issued an amended FEIS to reflect additional spill modelling work as directed by the Minnesota Court of Appeals. The MPUC has initiated a public comment period on the adequacy of the FEIS and what actions the MPUC should take with respect to the Certificate of Need and Route Permit. The public comment period closes on January 16, 2020 and provides for a one-day oral comment session for the public on December 19, 2019.
The Company will require further clarity on regulatory and permitting process and timing before it is in a position to assess the implications to the in-service date of the U.S. segment of the pipeline.
Today, Enbridge notified the Canada Energy Regulator that it intends to file a regulatory application for contracting the Mainline system before the end of the year. Enbridge has strong support for this application from a cross section of producers, integrated producers and refiners representing a significant share of current system throughput and through its evidence will demonstrate that its proposed contract offering addresses customer needs and serves the public intertest.
Details of Enbridge’s Investor Conference
Enbridge will hold its annual investor conference to discuss the Company’s strategic plan and financial outlook at 8:00 a.m. ET on Tuesday, December 10th, in New York City.
The conference will be webcast live on the Company’s website and can be accessed via the following link: Sign-up
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