May 11, 2017 / 11:53 AM / 2 years ago

UPDATE 3-Canada's Enbridge eyes acquisitions and profit rise on Spectra deal

(Adds details from annual meeting)

By Ethan Lou

CALGARY, Alberta, May 11 (Reuters) - Enbridge Inc , North America’s largest energy infrastructure company, said on Thursday it may acquire more assets and forecast a rise in adjusted earnings this year following its purchase of Spectra Energy Corp.

Enbridge bought Spectra for $28 billion in a deal that closed on Feb. 27, highlighting the pressure faced by pipeline companies to merge as they grapple with over-capacity.

Calgary, Alberta-based Enbridge, which reported a lower-than-expected profit for the first quarter on Thursday, said it expects adjusted profit before interest and taxes of C$7.2 billion ($5.3 billion) to C$7.6 billion in 2017, compared to C$4.7 billion last year.

On a conference call, Chief Executive Al Monaco said the company may be interested in other acquisitions smaller in scale than Spectra, although he did not name any targets.

Monaco added the company is interested in expanding its BC Main Line gas pipe in western Canada, which would cost about C$1 billion, and is gauging shipper interest.

Monaco also said Enbridge may form subsidiaries to deal with the new assets from its Spectra acquisition to reduce leverage.

Construction for Enbridge’s Line 3 pipeline project from Alberta to Superior, Wisconsin, will continue regardless of a legal challenge from an aboriginal group in the province of Manitoba, Monaco said.

At an annual meeting later on Thursday, with aboriginal protesters gathered outside, shareholders defeated a resolution seeking disclosure of how the Enbridge addresses issues including indigenous rights. Nearly 70 percent voted against.

The resolution had been filed by the Sisters of Charity non-profit as a response to Enbridge’s recent acquisition of a 27.5 percent stake in the Dakota Access Pipeline, which some aboriginal groups in the United States oppose.

Some such groups have pressured banks not to fund pipeline projects. Monaco said he was “always concerned” about such pressure, adding that Enbridge prioritizes consulting with aboriginal people and addressing their concerns.

In the first quarter ended March 31, Enbridge said available cash flow from operations to fell to C$3.60 to C$3.90 per share this year, from C$4.08 per share in 2016.

Weak earnings from Enbridge’s liquids pipeline business weighed on profit. Excluding a C$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. ($1 = 1.3697 Canadian dollars) (Reporting by Swetha Gopinath in Bengaluru and Ethan Lou in Calgary, Alberta; editing by Paul Simao and Tom Brown)

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