Canadian pipeline operator Enbridge Inc on Thursday reported a loss for the first quarter compared with a profit a year earlier, hit by nearly C$4 billion in charges related to its investment in DCP Midstream and derivative losses, as reported by Reuters.
Alberta-based Enbridge said the COVID-19 pandemic and resulting decline in demand for fuel pressured its Mainline system. Throughput on the pipeline system, which can ship 3 million barrels per day (bpd) of crude from Alberta to the United States, was down about 400,000 bpd in April.
It is likely to drop by an average of 400,000 to 600,000 bpd in the second quarter, as Western Canadian producers cut 1 million to 1.5 million bpd of output, Chief Executive Al Monaco said.
Despite the drop, Enbridge’s volumes are underpinned by refinery demand for heavy oil, the main crude produced in Western Canada, which is holding up better than light oil, he said.
A recent plunge in global crude prices due to lost demand caused by the pandemic has battered Canada, the world’s fourth-largest crude producer.
Over the past few weeks, North American oil companies have announced steep output curbs, slashed spending, cut dividends and suspended buybacks in response to the price rout.
Enbridge has deferred C$1 billion in capital spending and cut costs by C$300 million, including salary cuts and retirements, Monaco said.
Enbridge announced C$400 million worth of asset sales, including two North America electricity and gas lines and an interest in French offshore wind projects.
The company’s shares rose 5% in Toronto, as oil prices jumped.
Net loss attributable to common shareholders was C$1.43 billion ($1.02 billion), or 71 Canadian cents per share, in the first quarter, compared with a profit of C$1.89 billion, or 94 Canadian cents per share a year earlier.
On an adjusted per share basis, the company, however, earned 83 Canadian cents, while analysts, on average, had expected a profit of 74 Canadian cents, according to IBES data from Refinitiv.
Reporting by Shradha Singh in Bengaluru and Rod Nickel in Winnipeg; Editing by Saumyadeb Chakrabarty, Krishna Chandra Eluri and Jonathan Oatis
