Aug. 1 (Bloomberg) -- Imperial Oil Ltd., the second-largest Canadian crude producer by market value, said quarterly profit fell 49 percent after recording a C$264 million charge associated with converting its Dartmouth refinery to an oil terminal.
Second-quarter net income declined to C$327 million ($317 million), or 38 cents a share, from C$635 million, or 75 cents, a year earlier, the Calgary-based company said in a statement today. Excluding one-time items, per-share profit missed the 98-cent average of eight analysts’ estimates compiled by Bloomberg. Sales increased 5.9 percent to C$7.96 billion.
Imperial announced in June it will convert its 95-year-old refinery in Nova Scotia into a terminal after being unable to find a buyer for the facility, which struggled to compete because it used higher priced Brent crude oil. The company continues to increase output from its Kearl oil-sands project as it completed planned maintenance at two of its oil-sands projects during the quarter.
“It was a messy quarter financially due to downtime and charges related to the Dartmouth refinery,” Nick Sellmer, a Calgary-based analyst for Macquarie Capital Markets, wrote in a note to clients today. The company’s refining results were weaker than expected as the margin for processing oil into fuels fell, he wrote.
Cash from operating activities fell to $738 million from C$1.32 billion. Gross output in the quarter averaged the equivalent of 276,000 barrels a day of oil, up from 269,000 a year earlier.
Imperial, which is 70 percent-owned by Exxon Mobil Corp., began production at the Kearl project in Alberta in April, after delaying the C$12.9 billion project several times. Kearl is on schedule to produce 110,000 barrels a day by the end of the year, the company said. Output is expected to rise to 345,000 barrels by the end of this decade, according to the company’s website.
Imperial dropped 0.4 percent to C$43.89 at 9:42 a.m. in Toronto. The stock has one sell, four buy and 10 hold recommendations from analysts, according to data compiled by Bloomberg.
Suncor Energy Inc. is the largest Canadian oil producer by market value.
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