Enbridge earnings sink as oil drops

Company cautions its growth can be volatile because of complex hedging program

CALGARY— Enbridge Inc. reported net earnings attributable to shareholders of $577 million in the second quarter of 2015, down from $756 million in the same period last year.

The oil and gas company, which has been hit by the slide in oil prices that began in July 2014, said the profit amounts to 68 cents per common share in the quarter ending June 30, down from 92 cents per share in the corresponding period last year.

The company’s pipeline business, which takes in some revenue in U.S. dollars, was buoyed by the slide in the value of the Canadian dollar to take in $409 million in the quarter, down from $431million last year.

Enbridge cautioned that its quarter-to-quarter earnings growth can be volatile because of its complex hedging program, which is designed to mitigate the effect of interest rates, foreign exchange and commodity price fluctuations.

The company said its natural gas business took a $440-million goodwill impairment charge because of a prolonged downturn in commodity prices that has reduced the activity of natural gas producers.

Enbridge said its adjusted earnings for the quarter were $505 million, up from $328 million last year.

In June, the National Energy Board approved Enbridge’s plan to expand its Line 9B pipeline between Ontario and Quebec on the condition that the company completes safety testing on the line. After the pipe is flushed with water at high pressure to prove it is free of leaks, the company would be allowed to reverse the flow of the crude-oil pipeline to supply Quebec refineries with domestic oil.