Suncor quarterly profit drops
By RICHARD BLOOM
Globe and Mail Update
Suncor Energy Inc. , one of the world's top miners of oil sands, posted sharply lower first-quarter results Thursday, blaming sluggish commodity prices and reduced profit margins within its downstream refining division.
The Calgary-based energy firm said it made $83-million or 37 cents a share on sales of $1.05-billion for the three-month period ended March 31. That translates to a 23-per-cent decrease from last year's first quarter results of $108-million or 49 cents a share on revenue of $1.087-billion.
Despite that decline, Suncor still managed to beat analysts' consensus earnings expectations of 35 cents a share. Forecasts ranged from 32 cents to 39 cents a share, according to Thomson Financial/First Call.
Cash flow ? a key gauge of an oil-and-gas firm's ability to fund future exploration ? slipped to $181-million from $275-million during the same period last year.
"During the first three months of the year, we definitely saw an upward trend in production from oil sands, as we put the new Millennium facilities to the test," Rick George, Suncor's president and chief executive officer, said in a statement.
"We proved the expanded plant has the capacity to double oil production and despite a few set backs, we made significant progress in improving operational performance."
Suncor said it produced an average of 212,300 barrels of oil equivalent per day, up from its year-earlier tally of 146,900 b/d.
"Since completing the Millennium expansion late last year, Suncor predicted the job of transitioning the new facilities to full operations during the first six months and especially through the winter would be demanding," added Mr. George.
"Along with the challenges that come with any new operation, an extended period of cold weather and an unexpected power outage impacted oil sands production."
The company said its net debt totalled $3.2-billion at the end of the quarter, up from its Dec. 31, 2001 debt of $3.1-billion. Suncor said it plants to reduce its debt by $700-million by the end of 2003.
Earlier this month, Suncor said its daily oil production will fall by about 18 per cent in April after a fire shut part of its refining plant.
The plant's hydrogen unit will be closed for about 10 days after a leaking gasket led to a small fire, the company said in a statement.
Production this month will average about 180,000 b/d, down from more than 220,000 b/d in early April.
Before that announcement, Suncor subsidiary Sunoco said it has sold its natural gas sales and marketing business in Central Canada for $66-million to a unit of Mississauga-based Energy Savings Income Fund.
Sunoco supplies natural gas to about 120,000 customers in Ontario and Quebec under fixed-price contracts. Sunoco said it was leaving the gas marketing area to concentrate on its petroleum refining and marketing business. |
