Imperial Oil Ltd. has posted $511 million (CAD 675 million) in net income for the second quarter, down $1.3 billion (CAD 1.734 billion) against the same period 2022 due to lower output and refining margins.
Maintenance activity resulted in upstream production falling to 363,000 gross barrels of oil equivalent a day. “Lower volumes were primarily driven by the timing of planned turnaround activities at Syncrude, and production and steam cycle timing at Cold Lake, partially offset by the absence of extreme cold weather and reduced unplanned downtime at Kearl”, the Canadian company said in a press release Friday.
Downstream, refinery throughput stood at 388 barrels per day and capacity utilization at 90 percent, both down by prior-quarter and year-ago comparisons. “Lower refinery throughput in 2023 reflects the impact of planned turnaround activities at the Strathcona refinery”, Imperial said.
Refining margins, or the difference in value between refinery output and input, decreased due to “weaker market conditions”.
“During the first half of 2023, the price of crude oil decreased as the global oil market saw higher inventory levels. In addition, the Canadian WTI/WCS [West Texas Intermediate/Western Canada Select] spread continued to recover in the second quarter, but remains weaker than the first half of 2022. Refining margins declined on steady supply of diesel”, it said.
Net earnings for the first half totaled $773.9 million (CAD 1.023 billion), down $1.26 billion (1.659 billion) compared to the same period last year.
The Calgary city-based company collected $669.5 million (CAD 885 million) from operations in the second quarter of 2023, down from $2 billion (CAD 2.682 billion) in the corresponding 2022 period. It had $1.8 billion (CAD 2.376 billion) in cash and cash equivalents as of the end of the first half of 2023.
Total debt decreased to $3.1 billion (CAD 4.144 billion) as of June 30 from $3.9 billion (CAD 5.166 billion) by the end of the first six months of 2022.
Imperial had declared a quarterly dividend of 50 cents per share for the second quarter, distributing $257 million in total. It said it was maintaining that amount for the third quarter.
It plans to accelerate its shares buyback program eyeing over 29 million units in the one year to June 2024. It said June 27 it had received the final approval from the Toronto Stock Exchange for a new course issuer bid.
“Imperial plans to accelerate its share purchases under the normal course issuer bid program, and anticipates repurchasing all remaining allowable shares prior to year end”, Imperial said in Friday’s quarterly announcement.
Meeting the Zacks Consensus Estimate in earnings per share, Imperial ended the week higher on both the Toronto and the New York stock exchanges.
It expects stronger production in the second half of the year following maintenance completion. Imperial also said it had “finished drilling and completion of all wells”.
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