TransCanada’s Q2 results highlight industry-leading growth plan
If you had invested $1,000 in TransCanada at the turn of the last century, today you would have more than $9,000 (assuming all dividends were reinvested). Most people would consider that a good investment over the last 16 years, equating to a 15 per cent average annual return since 2000. And with more than $25 billion in growth projects underway for the end of this decade, the company plans to continue its track record of delivering value to its shareholders.
Acquisition of Columbia added to TransCanada’s growth portfolio
That is the message from President and CEO Russ Girling as TransCanada announced its financial results for the second quarter of 2016 today. The successful acquisition of Columbia Pipeline Group on July 1 added US$7.3 billion of natural gas pipeline projects to TransCanada’s near-term growth portfolio, which includes new pipeline and power generation facilities that are under development across North America. Combined with an already strong and well performing asset base that provides the energy millions of people rely on every day, Girling expects TransCanada to continue growing its dividend and providing shareholders with excellent value.
“Our industry-leading $25 billion portfolio of near-term capital projects builds upon a solid portfolio of stable and predictable pipeline and energy assets that together supports and may augment an expected eight to ten per cent annual dividend growth rate through 2020,” Girling said.
“Through a disciplined approach and the careful execution of our plans, including the Columbia integration, I’m confident we will achieve our vision of being the leading energy infrastructure company in North America while continuing to generate superior risk adjusted returns for our shareholders,” he said.
Stronger results are expected going forward
TransCanada’s second quarter net income and comparable earnings were lower than the same period last year, due primarily to one-time payments related to the Columbia acquisition and planned maintenance outages at Bruce Power. With those events behind us, Girling said stronger results are expected going forward. Following our merger with Columbia, TransCanada is one of North America’s largest natural gas transportation companies, moving more than 25 per cent of the continent’s demand. We are deeply connected to the communities where we operate and remain focused on maintaining and building on our industry leading safety and operating record.
Continuing to advance numerous projects
We also continue to advance numerous projects, some of which are expected to begin service throughout 2016. $450 million of new facilities entered service on the NGTL System in the second quarter of 2016 and $400 million more are currently under construction. Meanwhile in Mexico, we were chosen along with a joint venture partner to build, own and operate a new US$2.1 billion natural gas pipeline, while our Topolobampo and Mazatlan pipeline projects are on track to begin service later this year.
Our Liquids Pipelines business also continues to grow. Construction on Houston Lateral and Terminal facilities is now complete and the first deliveries on this new southern extension of the Keystone Pipeline System are expected to begin in August. And our $15.7-billion Energy East Pipeline project achieved a major milestone last month with the National Energy Board of Canada (NEB) determining that the project’s application is complete. The 21-month NEB regulatory review process for the project is scheduled to begin August 8.
“Today our company is better positioned to grow cash flow, earnings and dividends than at any other time in our history,” Girling said. “We marked another solid quarter and were excited to have closed the Columbia acquisition and are confident that this acquisition will lead to both near- and long-term opportunities for the company.”
*This blog contains information that is forward-looking and is subject to important risks and uncertainties. All forward-looking statements reflect TransCanada’s beliefs and assumptions based on information available at the time the statements were made and as such are not guarantees of future performance. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed. TransCanada undertakes no obligation to update or revise any forward-looking information except as required by law. For additional information on the assumptions made, and the risks and uncertainties which could cause actual results to differ from the anticipated results, refer to TransCanada’s Second Quarter Report to Shareholders dated July 27, 2016 and 2015 Annual Report on our website at www.transcanada.com or filed under TransCanada’s profile on SEDAR at www.sedar.com and with the U.S. Securities and Exchange Commission at www.sec.gov.