Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Husky Third-Quarter Profit Falls as Refining Returns Decline

Oct. 24 (Bloomberg) -- Husky Energy Inc., the Canadian oil and natural gas producer controlled by Hong Kong billionaire Li Ka-Shing, said third-quarter profit fell 2.7 percent on lower refining margins.

Net income dropped to C$512 million ($492 million), or 52 cents a share, from C$526 million, or 53 cents, a year earlier, the Calgary-based company said in a statement today. Excluding a foreign exchange loss and other items, per-share profit of 55 cents exceeded the 54-cent average of 11 analysts’ estimates compiled by Bloomberg.

Husky, an integrated energy company with refining operations in Ohio and an upgrader in Western Canada, said its margin from processing crude oil into fuels such as diesel and gasoline in the U.S. slid 51 percent from a year earlier to average $11.86 per barrel. Oil prices in the U.S. rose 15 percent to average $105.81 a barrel in the quarter.

“Clearly if you look at the market, the market in the U.S. is not particularly strong at this point in time,” Alister Cowan, Husky’s chief financial officer, said on a conference call today, predicting no “significant recovery” for refining margins for the rest of the year.

Husky is developing the Liwan offshore natural gas project in the South China Sea and the Sunrise oil-sands development in Canada to boost equivalent oil output 5 to 8 percent in each of the next four years. Liwan is more than 95 percent complete with first production due in the coming months, Husky said. Sunrise is about 80 percent finished and on schedule to start in the second half of 2014.

Oil Discoveries

There is a “high likelihood” of commercial development of oil discoveries in the Flemish Pass Basin off Newfoundland and Labrador with its partner Statoil ASA of Stavanger, Norway, Asim Ghosh, Husky’s chief executive officer, said on the call. Development will probably happen early in the next decade, he said. The companies announced a third discovery last month.

Sales increased 9.3 percent to C$5.8 billion in the quarter from last year.

Husky cut its gas production forecast for the year to 500 million to 520 million cubic feet a day from a previous goal of 540 million to 580 million cubic feet. The company is reducing spending on gas amid slimmer economics, Cowan said on the call.

“We view the results as neutral given they were in line with Street expectations in terms of both earnings and production,” Randy Ollenberger, an analyst at BMO Capital Markets in Calgary who rates Husky the equivalent of a hold, wrote in a note today.

Husky rose 1.7 percent to C$29.68 at the close in Toronto. The shares have five buy and 12 hold recommendations from analysts.

To contact the reporter on this story: Rebecca Penty in Calgary at rpenty@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.