Enbridge Inc., Canada's largest pipeline company, forecast a big rise in adjusted earnings before interest and taxes this year, following its acquisition of smaller rival Spectra Energy Corp.
Enbridge said last September it would buy Spectra, then valued at $28 billion, to create the largest energy infrastructure company in North America.
The deal, which closed on Feb. 27, highlighted the pressure on pipeline companies to merge as they grapple with overcapacity and sliding tariffs.
Calgary, Alberta-based Enbridge, which reported a lower-than-expected profit on May 11, said it expects adjusted profit before interest and taxes between CA$7.2 billion (US$5.25 billion) and CA$7.6 billion in 2017, much higher than the CA$4.7 billion it earned in 2016.
However, the company said it expects available cash flow from operations to fall between CA$3.60 and CA$3.90 per share this year, from CA$4.08 per share in 2016.
Weak earnings from Enbridge's liquids pipeline business weighed on profit in the first quarter ended March 31. Adjusted earnings in the unit fell 10% to CA$970 million in the quarter.
Net earnings attributable to shareholders fell 47% to CA$638 million, or 54 Canadian cents per share.
Excluding a CA$416 million derivative gain and other one-time items, adjusted profit was 57 Canadian cents. The analysts' average estimate was 62 Canadian cents, according to Thomson Reuters I/B/E/S.
(US$1 = CA$1.3710)