Imperial Oil shares sag on cash flow miss, but profit beats expectations

By Ankit Kumar and Rod Nickel

(Reuters) -Canada's Imperial Oil Ltd reported weaker than expected quarterly cash flow on Friday that weighed on shares, even as its profit beat expectations.

Signs of slowing global inflation and optimism around China's economy have lifted fuel demand, while crude supplies are tight.

Imperial's cash flow per share, a measure of financial flexibility, was C$2.65 ($1.95), about 2% less than analysts expected, TD Securities said in a note. The reason was an income-tax catch-up payment, BMO Capital Markets said.

Imperial's shares dipped 0.7% while its Canadian peers' stocks rose 2% to 4%.

Chief Executive Officer Brad Corson said record-high quarterly production at Kearl, Imperial's biggest Alberta oil sands facility, and high refinery utilization rates boosted profits.

The company's crude capacity utilization stood at 96%, resulting in a total throughput of 417,000 thousand barrels per day (bpd) for the quarter, higher than 399,000 bpd a year earlier.

Refining margins remained high due to low inventory of petroleum products, the company added.

Calgary-based Imperial, majority-owned by Exxon Mobil Corp, said first-quarter upstream production averaged 413,000 gross barrels of oil equivalent per day (boepd), up from 380,000 boepd.

The company raised its quarterly dividend by 14% to 50 Canadian cents per share.

On an adjusted basis, the company earned C$2.13 cents per share in the quarter, compared with estimates of C$1.94, according to Refinitiv data.

Industrial wastewater containing toxins including arsenic and dissolved iron has been seeping from tailings ponds at Kearl since at least May last year.

Corson said the company expected to complete mitigation efforts by the end of May.

Imperial said monitoring shows there have been no impacts to local drinking water sources or wildlife.

Pathways Alliance, a group of oil sands producers that includes Imperial, has begun designing a carbon capture hub and intends to apply to regulators this year, Imperial said.

($1 = 1.3556 Canadian dollars)

(Reporting by Ankit Kumar in Bengaluru and Rod Nickel in Winnipeg, Manitoba; Editing by Krishna Chandra Eluri)