Enbridge announces 2025 financial guidance, 3% dividend increase, and reaffirms near-term growth outlook

Highlights

Announced 2025 adjusted earnings before interest, income taxes and depreciation (EBITDA) guidance of US$19.4 billion to US$20.0 billion and distributable cash flow (DCF) per share of US$5.50 to US$5.90

Declared 30th consecutive annual common share dividend increase, raising it by 3.0% to US$0.9425 per quarter (US$3.77 annualised), effective 1 March 2025

Reaffirmed 2024 full year guidance for EBITDA and DCF per share; the Company expects to finish the year near the top end of the EBITDA range of US$17.7 billion to US$18.3 billion, and around the midpoint for DCF per share

The Company reaffirmed its 2023 to 2026 growth outlook of 7-9% for EBITDA growth, 4-6% for adjusted earnings per share (EPS) growth and approximately 3% for DCF per share growth

CEO comment

Commenting on the Company's outlook, Greg Ebel, President and CEO of Enbridge, noted the following:

"Global oil consumption has rebounded to all-time highs and increasing natural gas demand is being driven by LNG growth, coal to gas switching and the rapid increase in electric power demand stemming from new datacenter developments. Enbridge's incumbent footprint across its four core businesses puts the Company in an unparalleled position to meet increasing conventional and new energy demand in North America and beyond. As the world navigates a dynamically shifting macro backdrop, Enbridge will continue to play a leading role delivering safe, reliable and affordable energy.

"Our 2025 guidance, once again, reflects the predictability embedded across our businesses. We expect to generate EBITDA between US$19.4 and US$20.0 billion. This represents a 9% increase from the midpoint of our 2024 recast guidance and is 17% higher than our original 2024 guidance, driven by a full year of contributions from our US gas utilities acquisitions, the roughly US$5 billion of secured projects we're on track to place into service in 2024 and continued strong expected utilisation of our assets.

"Enbridge's business model is designed to succeed and deliver reliable cash flow in all market cycles. We are pleased to announce a 3% increase to the common share dividend, marking the 30th consecutive annual increase. Consistent dividend growth is an important component of our investor value proposition and underpins our dividend aristocrat status. We are committed to being a first-choice investment opportunity today and into the future. "Looking forward, Enbridge is well-positioned to continue to deliver reliable growth. Year-to-date, we have added US$7 billion of new capital to our secured growth backlog and announced ~US$1 billion of highly strategic, accretive tuck-in acquisitions. Our financial guardrails of 4.5-5.0x Debt-to-EBITDA and 60-70% DCF payout remain firmly in place, and we anticipate tailwinds to these metrics through the balance of our outlook."

Dividend increase

Enbridge announces that the quarterly common share dividend for 2025 will be increased by 3.0% from US$0.915 to US$0.9425 per common share, commencing with the dividend payable on 1 March 2025, to shareholders of record on 15 February 2025.

Capital investments and financing plan

Enbridge expects to deploy approximately US$7 billion of capital in 2025, exclusive of maintenance capital. We expect the balance sheet to remain strong with the Debt-to-EBITDA ratio at the end of 2025 expected to be well within the Company's 4.5-5.0x target range. The financing plan includes approximately US$9 billion of debt issuances in 2025 which is substantially earmarked for the refinancing of US$7 billion of debt maturities, with no external equity required. The Company has hedged a portion of its anticipated fixed-rate term-debt issuances for 2025.

Enbridge day and outlook

The Company is reaffirming its 2023 to 2026, near-term growth outlook of 7-9% for EBITDA growth, 4-6% for EPS growth and approximately 3% for DCF per share growth At Enbridge's annual investor day conference planned for 4 March 2025, in New York, Management will discuss energy fundamentals, competitive position, strategic priorities, capital allocation and the longer-term outlook.

Read the article online at: https://www.worldpipelines.com/business-news/03122024/enbridge-announces-2025-financial-guidance-3-dividend-increase-and-reaffirms-near-term-growth-outlook/