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Introduction & Market Context
Enbridge Inc. (NYSE:ENB) delivered its first quarter 2025 update on May 9, showcasing record financial results amid ongoing expansion of its diversified energy infrastructure portfolio. The company’s stock has been performing well, closing at $45.78 on May 8, with premarket trading showing a 2.58% increase to $46.96 ahead of the presentation.
The Canadian energy infrastructure giant continues to leverage its strategic position across North America, with President & CEO Greg Ebel and EVP & CFO Pat Murray presenting a quarter marked by strong operational performance and disciplined growth across multiple business segments.
Quarterly Performance Highlights
Enbridge reported exceptional financial results for Q1 2025, with adjusted EBITDA reaching $5,828 million, an impressive 18% increase from $4,954 million in Q1 2024. Distributable cash flow rose to $3,777 million compared to $3,463 million in the prior year period, while adjusted earnings per share grew to $1.03 from $0.92, representing a 12% year-over-year increase.
The company highlighted several key operational achievements, including record Mainline volumes of 3.2 million barrels per day and strong performance across its business segments.
As shown in the following quarterly financial results:
Key growth drivers included strategic acquisitions, higher volumes and tolls across the system, contributions from rate cases, and favorable USD translation effects. These positive factors were partially offset by decreased contributions following the sale of Alliance and Aux Sable assets, as well as increased financing costs.
Strategic Growth Initiatives
Enbridge has added approximately $3 billion of accretive, low-risk projects to its growth backlog year-to-date, reinforcing its disciplined approach to capital deployment across its North American footprint.
Notable strategic moves include the sanctioning of up to $2 billion in Mainline Capital Investment through 2028, a 100,000 barrels per day open season on the Flanagan South Pipeline, and the acquisition of a 10% equity interest in the Matterhorn Express Pipeline, a 2.5 Bcf/d natural gas pipeline. The company also sanctioned the Traverse Pipeline, which will provide up to 1.75 Bcf/d of natural gas capacity, and the Birch Grove Expansion adding 179 MMcf/d.
The company’s strategic growth initiatives across its footprint are illustrated here:
Business Segment Performance
Enbridge’s business model continues to demonstrate resilience across economic and commodity cycles, with over 98% of EBITDA coming from regulated or take-or-pay contracted sources. The company maintains negligible commodity exposure, with less than 1% of EBITDA tied to commodity pricing, while approximately 80% of EBITDA benefits from inflation protection.
The diversified business mix provides stability and multiple growth avenues, as shown in this breakdown:
In the Liquids Pipelines segment, Enbridge reported record first-quarter Mainline volumes of 3.2 MMbpd and record quarterly EIEC exports. The Gas Transmission business is enabling approximately 8 Bcf/d of sanctioned growth through 2030, including the recently acquired interest in Matterhorn Pipeline and the sanctioned Traverse Pipeline.
The company’s Permian franchise has been particularly active, with Enbridge acquiring $2 billion of operating assets since March 2024. By 2027, the company expects its equity interest in Permian takeaway capacity to reach 30%.
In the renewable power segment, Enbridge is on track to place over 500 MW of solar generation into service in 2025, all backed by long-term power purchase agreements. The Orange Grove (130 MW) project has already entered service, with the Sequoia projects (approximately 815 MW) expected to come online in 2025-2026.
Financial Outlook and Guidance
Enbridge reaffirmed its 2025 financial guidance, projecting adjusted EBITDA to increase from $18.0 billion in 2024 to $19.7 billion in 2025, while DCF per share is expected to rise from $5.60 to $5.70 over the same period.
The company provided insight into budget sensitivities for 2025, noting that a $0.01 change in CAD/USD exchange rate would impact adjusted EBITDA by approximately $50 million, while a 25 basis point change in interest rates would affect monthly interest expense by about $2.5 million.
The financial outlook is visualized in the following chart:
Enbridge also highlighted the seasonal nature of its EBITDA, with approximately 30% expected in Q1, 20% in Q2, 20% in Q3, and 30% in Q4 of 2025.
Capital Allocation Strategy
Enbridge’s capital allocation priorities remain focused on maintaining balance sheet strength, with a target leverage ratio of 4.5x to 5.0x debt-to-EBITDA. The company is committed to sustainable return of capital, maintaining a Distributable Cash Flow payout range of 60-70%, while prioritizing low-multiple brownfield opportunities for further growth.
The company outlined its annual investment capacity of $9-10 billion, consisting of $4-5 billion in foundational allocation, $4-5 billion for organic projects, and $1-2 billion in excess capacity.
This capital allocation framework is illustrated here:
Enbridge emphasized its track record of 30 consecutive years of dividend increases and projected approximately 5% growth through the end of the decade, positioning itself as a "first-choice investment" with a low-risk, utility-like business profile and predictable cash flows.
The company’s secured capital program totals $28 billion, with $5 billion spent to date on various projects including the Gray Oak & Ingleside Expansion (2025-2026), Mainline Capital Investment (2025-2028), Woodfibre LNG (2027), and utility growth capital (2025-2027).
With its diversified asset base, strong financial performance, and disciplined growth strategy, Enbridge continues to demonstrate resilience in an evolving energy landscape while delivering consistent returns to shareholders.
Full presentation:
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