Energy transportation and distribution firm Enbridge Inc. (ENB, ENB.TO) reported Wednesday an increase in fourth-quarter profit, reflecting lower expenses, helped by a decline in commodity costs. In addition, the company provided adjusted earnings guidance for fiscal 2010 and declared a 15% increase in quarterly dividend effective March 1, 2010.
For the fourth quarter, the Calgary, Canada-based company's earnings applicable to common shareholders increased to C$300 million or C$0.80 per share from C$264 million or C$0.71 per share in the previous year.
Adjusted earnings for the quarter grew to C$239 million or C$0.64 per share from C$202 million or C$0.55 per common share in the year-ago quarter.
The company noted that the increase in earnings for the quarter was also due to an allowance for equity funds used during construction in Liquids Pipelines and Enbridge Energy, L.P. as well as due to a higher contribution from Enbridge Energy Partners, both within Sponsored Investments segment.
Results also reflect favorable tax rate changes and net unrealized fair value gains on derivative financial instruments used to risk manage foreign exchange variability.
Revenues for the quarter decreased to C$3.19 billion from C$3.92 billion in the same quarter a year ago. Revenues from commodity sales declined to C$2.49 billion from C$3.12 billion in the prior year. Transportation and other services revenues for the period were C$696 million, lower than C$808 million in the preceding year.
Segment-wise, revenues from Liquid Pipelines increased to C$360 million from C$339 million in the previous year. Patrick Daniel, president and chief executive officer said, "Liquids Pipelines will continue to deliver strong growth in earnings and cash flow in 2010 as we move our two largest ever projects into day-to-day operations."
Natural Gas Delivery and Services revenues were C$2.73 billion, down from C$3.5 billion in the year earlier. "In Natural Gas, growth opportunities have never been better," the company said.
For the fourth quarter, revenues from Sponsored Investments segment decreased to C$82 million from C$84 million last year. Corporate segment revenues were C$13 million, compared to C$5 million in the preceding year.
Enbridge said it made significant progress in its green energy business during the year and now has interests in more than 460 megawatts of green power capacity from wind, solar, waste heat recovery and hybrid fuel cell generation. "Our Green Energy business will expand further in late 2010 when we bring the 99-megawatt Talbot Wind Farm in Ontario into commercial operation," said Daniel.
Total expenses dropped to C$2.88 billion from C$3.48 billion in the same period last year.
For the full year, the company's earnings applicable to common shareholders increased to C$1.55 billion or C$4.25 per share from C$1.32 billion or C$3.64 per share in the prior year. Annual revenues dropped to C$12.47 billion from C$16.13 billion a year ago.
"Our 2009 results, and the continued solid growth we expect to deliver in 2010 and beyond, are the direct result of our continued success in securing new opportunities across all businesses and then executing them on budget and on time. From the strong base we've achieved in 2009, we are confident in delivering continued growth of 10% per year on average into the second half of the decade," noted Daniel.
Looking ahead to fiscal 2010, the company expects adjusted earnings to be in a range of C$2.50 - C$2.70 per share.
The company also announced a quarterly dividend increase by 15% to C$0.425 per share effective March 1, 2010.
Separately, Enbridge said it agreed with Statoil Canada Ltd., for the addition of the company's Leismer oil sands project as a shipper on Enbridge's Regional Oil Sands System, which will bring the number of producing oil sands projects connecting to Enbridge's regional system to six.
The company noted that total production from the four Statoil project leases is expected to eventually reach 220 thousand barrels per day of bitumen.
ENB closed Tuesday's regular trading at $44.37 on the NYSE. In the past 52 weeks, the shares have been trading in a range of $27.49-$47.29.
ENB.TO ended on Tuesday at C$46.89 on the Toronto Stock Exchange. For the past one year, the shares traded between C$35.20-C$49.
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