The CEO of Canadian pipeline operator Enbridge Inc said last week that the company does not currently anticipate selling more assets in 2018 than it has publicly targeted, but will keep its options open.
Enbridge posted a quarterly profit that confounded analysts’ estimate after transporting a record number of barrels of liquids, including crude oil.
Last week it was reported by Reuters that the Calgary, Alberta-based company plans to accelerate its divestment programme by selling assets valued at approximately C$8 billion (US$6.4 billion) in 2018, more than twice its initial sale target.
CEO Al Monaco did not deny the report, but also told analysts on a conference call concerning the company’s fourth-quarter results that they should treat the report as “suspect” as “it’s not from us.”
In November, Enbridge forecast a C$3 billion target for non-core asset sales in 2018, and has identified C$10 billion in total of non-core assets to divest over time.
The company is under pressure to reduce debt from investors and rating agencies, following a C$28 billion merger last year with Spectra Energy Corp – a deal which included approximately C$14.5 billion of debt. In December, Moody’s Investors Service downgraded Enbridge’s rating one level to Baa2, citing the inadequacy of Enbridge’s divestiture plan to bolster its financial profile in “a timely manner.”
“There is certainly nothing that indicates to us that additional asset sales would be required, but obviously as we always would, if there are ideas that come forward or offers put on the table that we can’t turn down, then we’ll probably have a look,” Monaco said on the call.
Interest has been strong from potential buyers in renewable and gathering and processing assets, Monaco said.
Enbridge could sell its Midcoast Gas Gathering and Processing business in the United States as a block or in parcels, he said.
In response to the announcement of fourth-quarter earnings, the company’s shares rose 0.6% in Toronto and 0.4% in New York.
Enbridge transported 2.6 million bpd of crude oil on its Mainline system across Canada and the United States during 4Q17, up from 2.5 million bpd a year earlier.
Net income decreased to C$207 million (US$166 million), or 13 Canadian cents per share, in the quarter, from C$365 million, or 39 Canadian cents, a year earlier.
Enbridge said it took a C$4.55 billion charge in the latest quarter to write down assets in the gas transmission and midstream business.
Excluding items, the company earned 61 Canadian cents per share, surpassing the average analyst estimate by 5 Canadian cents, according to Thomson Reuters I/B/E/S.
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