Canadian pipeline giant Enbridge reported a first quarter 2020 net loss of $1.429 billion or 71 cents per common share, Kallanish Energy reports.
That compares to earnings of $1.891 billion or 94 cents per common share in 1Q 2019.
The latest financial report was impacted by a non-cash impairment of $1.736 billion tied to the company’s investment in DCP Midstream and $1.956 billion in non-cash unrealized derivative fair value losses, the Alberta-based company reported.
Adjusted earnings were $1.668 billion or 83 cents per share for 1Q 2020, compared to $1.640 billion or 81 cents per share in 1Q 2019.
Cash provided by operating activities was $2.809 billion, compared with $2.176 billion in 1Q 2019.
The coronavirus pandemic and the drop on demand for fuels resulted in Enbridge seeing a big drop in throughput on its Mainline oil pipeline system. It dropped 400,000 barrel per day drop in April, compared to the 1Q average of 2.84 million barrels per day.
Lower utilization rates are expected to continue through the second quarter 2020, it said.
Volumes are expected to improve in the second half of 2020, it said.
The Mainline system ships about 3 million barrels per day from Alberta to the United States.
It said its financial recovery will be impacted by the degree and the pace of Mainline throughout growth in the rest of the year.
Enbridge said it would delay about $1 billion in its 2020 capital spending budget and will trim about $300 million in operational costs.
“While the full economic impact of Covid-19 and pace of global recovery is still uncertain, were confident that Enbridge will persevere through the difficult conditions being faced by all of us today,” said president and CEO Al Monaco in a statement.
Enbridge said it had agreed to sell a 49% stake in its 50% share in Eolien Maritime France that is developing three offshore wind projects in France.
The buyer is the Canada Pension Plan Investment Board. Initial proceeds are expected to exceed $100 million.
When the deal closes, Enbridge will own 25.5% in Saint Nazaire, 17.9% in Fecamp and 21.7% in Courseulles.
The Saint Nazaire final investment decision was released last year. The other two projects are expected to get FIDs by next year.
The Saint Nazaire wind project calls for 80 turbines and 480 megawatts of electricity. It is expected to provide about $2.5 billion of incremental cash flows, Enbridge said.
Fecamp is a 498-megawatt project and Courseulles is a 450-megawatt project.
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