EARNINGS / Imperial Oil 1st Quarter 1998 Results
IMPERIAL OIL LIMITED - EARNINGS
TORONTO, April 24 /CNW/ - Imperial Oil Limited today announced
first-quarter net earnings of $113 million or 76 cents a share, down from $191
million or $1.21 a share during the first quarter of 1997.
The reduction in earnings resulted from substantially lower crude oil
prices, which were only partly offset by improved margins on sales of
petroleum products.
Total revenues fell to $2,238 million during the first quarter of 1998
from $2,696 million during the same period last year.
Imperial continued its program of purchasing shares during the first
quarter of 1998, acquiring 1.8 million shares for $153 million. The company's
balance of cash and short-term securities was $515 million at the end of the
quarter.
Bob Peterson, chairman and chief executive officer, said: ''Lower oil
prices make this a challenging environment for Imperial and again underscore
the importance of our long-standing commitment to improving those aspects of
the business that are within our control -- costs, volumes, asset quality, and
execution excellence.''
For further information, contact:
Investor Relations Media Relations
Jean Cote Richard O'Farrell
(416) 968-4262 (416) 968-4875
Imperial's Web site address is www.imperialoil.ca.
Past and current financial releases are located at
www.imperialoil.ca/investor/sect2.htm
Supplementary information
Natural resources
Net earnings from natural resources fell to $1 million during the first
quarter of 1998, compared with $120 million during the same period last year.
The reduction in earnings was attributable to a 35-percent drop in
revenues, which resulted from lower prices for crude oil, particularly heavy
oil, and decreased production of conventional oil caused mainly by major asset
sales in 1997. Bitumen production at Cold Lake rose to 126,000 barrels a day
during the latest quarter from 108,000 barrels during the same period in 1997.
The latest earnings included a gain of $10 million on asset sales, the same as
during the first quarter of 1997.
Petroleum products
Net earnings from petroleum products were $99 million during the first
quarter of 1998, up from $65 million during the same period in 1997.
The increase in earnings was due mainly to improved industry margins and
lower expenses. During the quarter the company completed asset sales that
contributed $7 million to earnings.
Chemicals
Net earnings from chemicals were $22 million, essentially unchanged from
$20 million during the first quarter of 1997.
Production of polyethylene increased as a result of a plant expansion
completed last September.
Corporate and other
Net earnings from corporate and other operations were negative $9 million
during the first quarter of 1998, compared with negative $14 million during
the same period last year. Higher interest income during the latest quarter
was the main reason for the change.
IMPERIAL OIL LIMITED
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CONSOLIDATED STATEMENT OF EARNINGS
(unaudited) Three months
to March 31
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millions of dollars 1998 1997
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REVENUES
Operating revenues 2,197 2,666
Investment and other income 41 30
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TOTAL REVENUES 2,238 2,696
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EXPENSES
Exploration 10 18
Purchases of crude oil and products 940 1,221
Operating 613 633
Federal excise tax 272 261
Depreciation and depletion 161 181
Financing costs (1) 40 40
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TOTAL EXPENSES 2,036 2,354
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EARNINGS BEFORE INCOME TAXES 202 342
INCOME TAXES 89 151
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NET EARNINGS 113 191
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PER-SHARE INFORMATION - dollars
Net earnings 0.76 1.21
Dividends 0.55 0.55
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Approved by the directors April 24, 1998
Chairman, president and Senior vice-president,
chief executive officer finance and administration
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IMPERIAL OIL LIMITED
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CONSOLIDATED STATEMENT OF CASH FLOWS Three months
(unaudited) to March 31
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inflow/(outflow)
millions of dollars 1998 1997
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OPERATING ACTIVITIES
Net earnings 113 191
Exploration expenses (a) 10 18
Depreciation and depletion 161 181
After tax (gain)/loss
from asset sales (17) (10)
Deferred income taxes and other 31 21
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Total cash flow from earnings 298 401
Change in operating assets and
liabilities (b) (260) (477)
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CASH FROM OPERATING ACTIVITIES 38 (76)
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INVESTING ACTIVITIES
Capital and exploration expenditures (106) (119)
Proceeds from asset sales 49 35
Marketable securities-net (7) (1)
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CASH FROM (USED IN) INVESTING ACTIVITIES (64) (85)
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CASH FLOW BEFORE FINANCING ACTIVITIES (26) (161)
FINANCING ACTIVITIES
Repayment of long-term debt - (91)
Common shares purchased (2) (153) (122)
Dividends paid (83) (88)
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CASH FROM (USED IN) FINANCING ACTIVITIES (236) (301)
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INCREASE (DECREASE) IN CASH (262) (462)
CASH AT BEGINNING OF PERIOD 748 561
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CASH AT END OF PERIOD (c) 486 99
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(a) Exploration expenses, deducted in arriving at net earnings, are
reclassified and included in investing activities in the consolidated
statement of cash flows.
(b) Includes outflows of $223 million in 1997 for taxes due on the
interest portion of a 1996 income tax refund.
(c) Total cash and short-term securities at March 31, 1998 was $515
million (1997 -- $121 million).
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IMPERIAL OIL LIMITED
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CONSOLIDATED BALANCE SHEET As at As at
(unaudited) Mar. 31 Dec. 31
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millions of dollars 1998 1997
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ASSETS
Cash and marketable securities at cost 515 770
Accounts receivable 876 1,090
Inventories of crude oil and products 583 466
Materials, supplies and prepaid expenses 155 102
Investments and other long-term assets 205 203
Property, plant and equipment 7,088 7,172
Goodwill 251 257
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TOTAL ASSETS (a) 9,673 10,060
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LIABILITIES
Current payables and accrued liabilities 1,829 2,158
Long-term debt (3) 1,515 1,506
Other long-term obligations 1,045 1,013
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TOTAL LIABILITIES 4,389 4,677
DEFERRED INCOME TAXES 1,023 1,000
SHAREHOLDERS' EQUITY 4,261 4,383
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TOTAL LIABILITIES, DEFERRED INCOME TAXES AND
SHAREHOLDERS' EQUITY 9,673 10,060
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(a) TOTAL ASSETS BY SEGMENT
Natural resources 4,547 4,635
Petroleum products 3,908 4,010
Chemicals 423 425
Corporate and other 921 1,162
Intersegment receivables eliminated
in consolidation (126) (172)
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Total Assets 9,673 10,060
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IMPERIAL OIL LIMITED
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BUSINESS SEGMENTS Three months
(unaudited) to March 31
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millions of dollars 1998 1997
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REVENUES
Natural resources
External 220 368
Intersegment 251 357
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Total 471 725
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Petroleum products
External 1,776 2,087
Intersegment 46 62
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Total 1,822 2,149
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Chemicals
External 225 231
Intersegment 9 18
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Total 234 249
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Corporate and other
External 17 10
Intersegment 2 2
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Total 19 12
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Total External Revenues (a) 2,238 2,696
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EARNINGS
Natural resources 1 120
Petroleum products 99 65
Chemicals 22 20
Corporate and other (9) (14)
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Net earnings 113 191
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CASH FLOW FROM EARNINGS
Natural resources 80 229
Petroleum products 183 140
Chemicals 29 26
Corporate and other 6 6
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Total cash flow from earnings 298 401
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CAPITAL AND EXPLORATION EXPENDITURES
Natural resources 82 94
Petroleum products 18 17
Chemicals 4 3
Corporate and other 2 5
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Total capital and exploration
expenditures 106 119
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(a) Includes export sales to
the United States 217 255
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IMPERIAL OIL LIMITED
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OPERATING STATISTICS Three months
(unaudited) to March 31
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1998 1997
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GROSS CRUDE OIL PRODUCTION
(thousands of barrels a day)
Conventional 71 92
Cold Lake 126 108
Syncrude 44 48
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Total crude oil production 241 248
Natural gas liquids (NGL's)
available for sale 20 23
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Total crude oil and
NGL production 261 271
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NATURAL GAS
(millions of cubic feet a day)
Production (gross) 445 504
Production available
for sale (gross) 271 313
Sales 330 376
AVERAGE SALES PRICES (dollars)
Conventional crude oil sales
(a barrel) 18.69 27.76
Par crude oil price
at Edmonton (a barrel) 22.03 30.47
Heavy crude oil at Hardisty
(Bow River, a barrel) 13.87 24.21
Natural gas sales
(a thousand cubic feet) 1.76 2.63
PETROLEUM PRODUCTS SALES
(millions of litres a day)
Gasolines 27.9 27.8
Heating, diesel and jet fuels 26.3 27.5
Heavy fuel oils 5.5 5.2
Liquefied petroleum gas, lube
oils and other products 12.0 10.5
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Total petroleum products 71.7 71.0
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Total refinery throughput
(millions of litres a day) 72.5 69.8
Refinery capacity utilization (percent) 93 90
PETROCHEMICAL SALES
(thousands of tonnes a day) 3.5 3.3
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IMPERIAL OIL LIMITED
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SHARE OWNERSHIP, TRADING AND PERFORMANCE Three months
(unaudited) to March 31
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1998 1997
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RETURN ON AVERAGE CAPITAL EMPLOYED (a)
(rolling 4 quarters, percent) 14.3 10.3
RETURN ON AVERAGE SHAREHOLDER EQUITY
(rolling 4 quarters, percent) 17.7 12.3
SHARE OWNERSHIP
Outstanding shares (thousands)
Monthly weighted average 148,431 158,022
At March 31 147,484 157,036
Number of shareholders
At March 31 18,295 18,970
SHARE PRICES (dollars)
High 91.50 65.60
Low 75.50 59.60
Close at March 31 80.15 64.30
(a) Capital employed is defined as short and long-term debt and
shareholders' equity.
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IMPERIAL OIL LIMITED
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
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1. Financing Costs Three months
to March 31
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(millions of dollars) 1998 1997
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Interest
Debt related interest 31 29
Other interest 1 -
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Total interest expense 32 29
Foreign exchange expense on
long-term debt (a) 8 11
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Total financing costs 40 40
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(a) There were no debt redemptions in the first quarter of 1998. In the
first quarter of 1997, the company redeemed $50 million (U.S.) of its
long-term debt for $67 million (Canadian), resulting in a $6 million
foreign-exchange expense ($4 million after tax).
2. Share Purchase Programs
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In 1995 and 1996 the company purchased shares under two 12-month normal
course share-purchase programs. Also in 1996, the company undertook an auction
tender in which 24 million shares were purchased at a total cost of $1,440
million. On June 19, 1997 another 12-month normal course program was
implemented with an allowable purchase of 7.7 million shares (five percent of
the total at that date), less any shares purchased by the employee savings
plan and company pension funds. The results of these activities are as shown
below.
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millions of
Year Shares Dollars
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1995 4.8 236
1996 30.1 1,772
1997 - First quarter 1.9 122
Full Year 9.6 694
1998 - First quarter 1.8 153
Cumulative purchases to date 46.3 2,855
Exxon Corporation's participation in the above maintained its ownership
interest in Imperial at 69.6 percent.
The excess of the purchase cost over the stated value of shares purchased
has been recorded as a distribution of retained earnings.
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IMPERIAL OIL LIMITED
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3. Long-term Debt As at As at
Mar. 31 Dec. 31
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(millions of dollars) 1998 1997
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Long-term debt (at period-end exchange rates) 1,666 1,677
Foreign-exchange loss on U.S.$ debt (a) (151) (171)
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Long-term debt 1,515 1,506
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(a) The foreign-exchange loss on U.S.-dollar debt is being amortized
to earnings over the remaining life of the debt.
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