Enbridge reports Q4 loss on asset revaluation, adjusted earnings miss estimates
Enbridge CEO Al Monaco addresses the company's annual meeting in Calgary, Wednesday, May 8, 2013. (Jeff McIntosh / THE CANADIAN PRESS)
Published Friday, February 14, 2014 9:00AM EST
CALGARY -- Enbridge Inc. (TSX:ENB) had a $267-million net loss in the fourth quarter as it recognized lower values for some of its assets and weaker operating results from energy services due to market conditions.
The Calgary-based pipeline and energy services company, which operates throughout North America, would have been profitable without the asset-related losses but still missed analyst estimates.
Analysts were looking for 46 cents per share in adjusted earnings, which exclude items that caused the loss, but Enbridge's results came in two cents below the estimates.
Enbridge said its adjusted earnings were affected by depressed market prices for ethane and lower volumes processed at its Aux Sable plant. As a result, its adjusted earnings from gas pipelines, processing and energy services fell to $17 million from $42 million a year earlier.
It also recognized during the quarter that market factors had reduced the value of its energy services businesses and the Aux Sable plant.
"Although profitability declined in most of Energy Services' lines of business, the fourth quarter loss primarily related to losses realized on financial contracts intended to hedge the value of committed physical transportation capacity, but which were not effective in doing so in the last three months of the year," the company said.
Enbridge's gas pipeline, processing and energy services division recorded a $337 million loss on the fair value of the derivatives during the quarter, compared with a year-earlier gain of $21 million.
Its other major divisions, which operate liquids pipelines and a natural gas distribution network, were profitable in the fourth quarter under standard accounting but less than in the comparable period in 2012.
On an adjusted basis, earnings from gas distribution rose slightly to $67 million from $63 million and adjusted earnings from its liquids pipelines jumped to $205 million from $177 million.
The company's net loss amounted to 32 cents per diluted common share, under standard accounting. That compared with a year-earlier profit of 18 cents per share, when Enbridge had $146 million of net income in the fourth quarter of 2012.
On an adjusted basis, Enbridge earned $362 million or 44 cents per share in the quarter, up from 42 cents per share in the comparable period of 2012 but short of analyst estimates of 46 cents per share.
In addition to the financial report, Enbridge announced its quarterly dividend will rise by 11 per cent.
The payout to Enbridge shareholders will rise to 35 cents per common share as of March 1.