Financial Post / Imperial Oil Profit Dives 40% As Low Oil Prices Hit
The Financial Post
jULY 24, 1998
Calgary - Low oil prices slammed Imperial Oil Ltd.'s second-quarter results, with earnings dropping 40% to $109 million (25› per share).
Higher refining margins in the three months ended June 30 partly mitigated the impact of declining world crude prices.
Profit in the year-ago quarter was $183 million (39›).
Revenue in the latest quarter fell 12% to $2.32 billion, while cash flow was down 22% to $288 million.
The effects of low oil prices showed up in earnings for the giant's exploration and production arm, which fell to $10 million from $74 million a year earlier. Heavy oil, of which Imperial produced 136,000 barrels a day from its Cold Lake, Alta., operations, has been particularly hard-hit by the price slump.
However, Imperial recouped some of its losses through lower feedstock costs for its refining division. Its profit for the quarter improved by $4 million to $95 million.
Earnings in the half totalled $222 million (50›), down from $374 million (80›) a year earlier.
Cash flow dropped to $586 million from $770 million. Revenue fell to $4.56 billion from $5.34 billion.
The company spent $279 million in the first half to buy back 10.3 million shares.
Shares (IMO/TSE) closed yesterday at $26.20, down 55›.
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