Calgary-based Suncor Energy reported Thursday it had a net loss of $2.335 billion in its fiscal fourth quarter compared to a net loss of $280 million in the fourth quarter of 2018.
However, the company also reported net earnings of $2.899 billion for 2019, which was down from net earnings of $3.293 billion in 2018.
In a news release, the company said its fourth quarter 2019 operating earnings were $782 million ($0.51 per common share), compared to $580 million ($0.36 per common share) in the prior year quarter.
“The increase was primarily a result of improved western Canadian crude oil differentials, including a substantial narrowing of heavy crude and SCO differentials, which more than offset lower benchmark pricing, from the prior year quarter. This resulted in an increase in Oil Sands price realizations and a net favourable inventory valuation change, partially offset by lower refining margins. Fourth quarter 2019 operating earnings were also positively impacted by increased production at East Coast Canada and Oda,” it said.
“Operating earnings were unfavourably impacted by lower Oil Sands production compared to the prior year quarter, primarily due to planned maintenance and the Alberta government’s mandatory production curtailments, higher depreciation, depletion, and amortization (DD&A) and royalties, and lower refinery crude throughput.”
Suncor’s net loss was $1.52 per common share in the fourth quarter of 2019 compared to a net loss of $0.18 per common share in the prior year quarter.
It said the net loss for the fourth quarter included $3.352 billion of non‑cash after-tax asset impairment charges partially offset by a $235 million unrealized after‑tax foreign exchange gain on the revaluation of U.S. dollar denominated debt. The net loss in the prior year quarter included an unrealized after‑tax foreign exchange loss of $637 million on the revaluation of U.S. dollar denominated debt and a non‑cash impairment loss of $223 million after‑tax on one of the company’s equity investments.
“Suncor continues to invest in high‑return projects and, in the fourth quarter of 2019, sanctioned the Forty Mile Wind Power Project, which is designed to provide reliable, low‑carbon power to the Alberta power grid,” said Mark Little, president and chief executive officer. “In addition, through our Petro‑Canada brand, we are contributing to the transformation of Canada’s energy system through the completion of our cross Canada network of fast‑charging electric vehicle stations. These projects are expected to generate value for Suncor shareholders and contribute to the company’s strategic sustainability goals.”
“In the fourth quarter of 2019, Suncor generated funds from operations of $2.6 billion, bringing annual funds from operations to a new record of $10.8 billion. In 2019, we returned $4.9 billion in dividends and share repurchases to shareholders, representing 45 per cent of our total funds from operations. Since the start of 2017, we have paid $7.1 billion in dividends and repurchased $6.7 billion of shares, representing over nine per cent of our outstanding common shares, demonstrating our commitment to shareholder returns.”
Mario Toneguzzi is a business reporter in Calgary.
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