Yahoo Finance Suncor finishes 2023 on a strong note, posts best-ever oilsands production numbers
Calgary-based Suncor Energy Inc. beat analysts’ expectations and finished strong in 2023 to counter a distracting year in which it welcomed a new chief executive, trimmed its workforce and tackled a cybersecurity incident.
“If I look at it, I would say in 2023 there was just a large amount of change,” chief executive Richard Kruger said on a conference call on Feb. 22. “I would describe a lot of that change as disruptive and potentially distracting, a lot of things that could distract people from performing.”
Despite the challenges, the company posted its best-ever oilsands production numbers during the three months that ended on Dec. 31.
It produced about 757,400 barrels per day in the fourth quarter as opposed to around 688,000 in the same quarter in 2022. Its total upstream production was about 808,100 barrels of oil per day, which the company said is its second highest in company history.
Adjusted earnings, however, fell to $1.63 billion in the fourth quarter, from $2.43 billion during the same period in 2022, which the company attributed to lower crude oil prices and a weak business environment. Its adjusted operating earnings of $1.26 per share was higher than analysts’ average estimate of $1.05.
“I think we built a lot of momentum in the fourth quarter,” Kruger said. “I think our starting pitcher is throwing strikes.”
Kruger, who became Suncor CEO 10 months ago, said the company had met most of the goals he had initially set, which included an “intense focus on the fundamentals” and a simpler, more focused organization. The steps helped the company report its safest ever year in the company’s history.
“We had no life-altering or life-threatening injuries for the first time since 2015,” he said.
Kruger said the company reduced its headcount by 20 per cent between June and November last year.
“We did this through the elimination of work that was judged to be low priority or simply unaffordable,” he said. “We spent $275 million in severance cost to achieve a $450-million annual savings starting this year, $50 million above our target.”
However, he added the company reduced its refining utilization guidance by a couple of percentage points due to a slow economic recovery in the first half of the year. Overall, he said there were still areas to improve in despite a good 2023.
Suncor also announced changes to its board, with the retirement of chair Michael Wilson and director Dennis Houston. Wilson, who has been chair since 2017, will be replaced by Russell Girling, former chief executive of TC Energy Corp., on March 15.
Suncor’s board underwent a number of changes in 2022 after entering an agreement with Elliott Investment Management LP after the Wall Street firm publicly called for a company shakeup due to its lagging share price performance, missed production targets and poor safety record in recent years, including at least 12 fatalities since 2014.
• Email: nkarim@postmedia.com
Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.
