Suncor Energy Inc., Canada’s largest energy company by market value, returned to profit in the fourth quarter and boosted its dividend as production from oil-sands projects increased.
Net income was C$443 million ($399 million), or 30 cents a share, compared with a restated loss of C$574 million, 38 cents, a year earlier, the Calgary-based company said yesterday in a statement on Marketwired. The 2012 quarter’s results included a C$1.49 billion one-time charge related to its canceled Voyageur oil project in Alberta.
Excluding one-time costs, per-share profit was 66 cents, less than the 77-cent average of 13 analysts’ estimates compiled by Bloomberg. Chief Executive Steve Williams has sold assets and has been reducing operation costs to boost cash flow and profit. Positive earnings were expected to lead to an increase in dividends, said Phil Skolnick, an analyst for Canaccord Genuity Group Inc., before the results were published.
“We recommend investors be long the stock going into the release as we see potential for a larger-than-expected dividend raise,” Skolnick wrote in a Jan. 22 note to investors. The company raised its quarterly dividend 54 percent last year to 20 cents.
Suncor boosted the dividend by 15 percent to 23 cents beginning in the first quarter, it said in the announcement.
Average production from Suncor’s oil-sands operations increased to a record 409,600 barrels a day in the quarter from 342,800 barrels in the year-earlier period. For 2014, average production from all its operations is expected to be between the equivalent of 525,000 barrels of oil to 570,000 barrels from an earlier estimate of between 565,000 barrels a day and 610,000 barrels.
Stopping the Voyageur project reflects “the priority we place on making smart choices when it comes to growing the company,” Williams said Dec. 4. Suncor and partners Total SA and Teck Resources Ltd. agreed in the fourth quarter to move ahead with the C$13.5 billion Fort Hills oil-sands venture which will produce 180,000 barrels a day in 2018.
Suncor also operates refineries in Alberta, Ontario, Quebec and Colorado which produce a combination of fuels, solvents and petrochemicals, according to the company’s website.
The announcement was made yesterday after the close of regular trading on North American markets. Suncor dropped 2.6 percent to C$35.64 in Toronto. The stock, which has declined 4.3 percent this year, has 20 buy and four hold recommendations from analysts.