ENB reported Q2/21 distributable cash flow per share of $1.24 ($1.21 in Q2/20), wellabove consensus of $1.09 and our $1.08 driven by a healthy EBITDA contribution($3,302M vs. consensus of $3,243M and our $3,145M) and lower interest expense.Equally important, 2021 guidance of $4.70-5.00 DCF/sh, EBITDA of $13.9-14.3B, andgrowth backlog of $17B were reaffirmed.
Key Points
Liquids Pipelines. Adjusted EBITDA of $1,844M ($1,744M in Q2/20) was nicely above our$1,759M, supported by recovery in Mainline volumes (2.623M bbls/d delivered to 2.6Mbbls/d guidance and up +7.5% YoY) and greater Mid-Continent and Gulf Coast ($261M vs.our $225M). In passing, the Mainline contracting hearing has recently concluded, with aCER decision expected later this year.
Gas Transmission & Midstream. Adjusted EBITDA of $935M also trumped our $872M(Q2/20 of $975M) with strength broadly across the portfolio (U.S. & Canadian GasTransmission, U.S. Midstream). ENB is evaluating the potential expansion of the EastTennessee Natural Gas system to support the Tennessee Valley Authority's plan toreplace an existing coal-fired power plant with natural gas (Ridgeline Expansionproject); construction could begin in 2025 with in-service fall 2026, pending approvaland receipt of permits.
Gas Distribution & Storage. Adjusted EBITDA of $461M came in above our $415M(Q2/20 of $406M) due to lower O&M, with weather only having a slight impact duringthe quarter ($1M vs. $22M benefit in the prior year period).
Renewable Power Generation. Adjusted EBITDA of $113M compared to our $103M(Q2/20 of $150M).
Energy Services. -$86M missed -$40M (Q2/20 of $86M) given the significantcompression of location and quality differentials and limited storage and transportationopportunities.
Eliminations and Other. $35M was close to our $36M (Q2/20 of -$49M).