Enbridge's gas pipelines carry its third quarter as oil earnings slip

What happened

Enbridge reported on Friday 6 November that its adjusted core profit for the third quarter was C$4.4 billion, up from C$4.3 billion a year earlier, as its gas businesses grew. ^{[1, 2, 5]}

The figures are in Canadian dollars, as the company reports them. Earnings attributable to common shareholders were C$1.3 billion, against C$682 million a year earlier; the company said the gap came mainly from non-cash changes in the value of its hedges. Adjusted earnings, which leave such items out, were C$1.1 billion against C$997 million. ^{[2, 5]}

Why it matters

The quarter shows the company's mix shifting: gas transmission's adjusted core profit was C$1.43 billion, up from C$1.26 billion, while the oil pipelines' was C$2.21 billion, down from C$2.31 billion. Enbridge reaffirmed its 2026 range for adjusted core profit of C$20.2 billion to C$20.8 billion. ^{[2, 5]}

Oil, gas and cash

The company said the oil decline came from lower Mainline volumes net of earnings sharing, lower tolls on Line 9 deliveries and contracts to the Gulf Coast that were not fully used. On the call, chief executive Greg Ebel said 'our mainline system has continued to operate at or near capacity', according to a Motley Fool transcript. The release gave no volume figure for the Mainline, the company's main oil line out of western Canada. ^{[2, 3, 6]}

Distributable cash flow, the company's measure of cash available after upkeep spending and payments to other owners, was C$2.7 billion against C$2.6 billion. Cash from operations was C$2.7 billion, down from C$2.9 billion. Debt stood at 5.1 times a year of core profit, which the company said was slightly above its target range because of the exchange rate. ^[2]

Projects and deals

Two gas projects entered service in the quarter: the Aspen Point expansion of the B.C. Pipeline and Tennessee Ridgeline. Enbridge sanctioned the C$0.2 billion Long Lake Expansion in Alberta, expected to enter service in 2028, and said its secured backlog of projects stands at about C$38 billion. ^[2]

It agreed to buy Tallgrass Energy's crude oil business for US$2.55 billion and closed its US$0.6 billion purchase of Salt Creek Midstream's Permian gathering business on Friday 9 October. The board declared a quarterly dividend of C$0.97 per common share, the same as the September payment. ^{[2, 4]}

What settles it next

The dividend is payable on Tuesday 1 December to holders of record on Friday 13 November. The Tallgrass purchase still needs regulatory approvals, and the US$485 million Laramie Energy purchase is expected to close in the fourth quarter, the company said. ^{[2, 4]}

Chief executive Greg Ebel retires on Thursday 31 December and Michele Harradence succeeds him on Friday 1 January, according to the transcript's summary. An Ohio regulator's decision on Enbridge Gas Ohio's rates is expected in or before the first quarter of 2027, the release said. ^{[2, 6]}

Who it reaches

Enbridge (ENB) is direct: the results, the range and the dividend are its own. KKR (KKR) and Apollo (APO) are adjacent: they closed an investment of about C$0.7 billion in Enbridge's Westcoast gas system and committed about C$2.0 billion more, for a stake reaching 29 percent. ^{[1, 2]}