Summary
Imperial Oil Ltd. reported solid financial results for the nine months ending September 30, 2012, with net income increasing to $2.69 billion, or $3.16 per diluted share, compared to $2.37 billion, or $2.77 per diluted share, in the prior year period. This growth was primarily driven by strong performance in the Downstream segment, which achieved record quarterly and year-to-date earnings due to favorable refining margins. The Upstream segment experienced a decline in net income, largely due to lower realizations for natural gas and Syncrude, along with increased production readiness expenditures for the Kearl project. Capital expenditures remained significant, with a substantial portion allocated to the Kearl initial development and expansion projects, which were nearing completion. The company also announced plans to evaluate a potential participation in the acquisition of Celtic Exploration Limited. Despite increased debt levels to fund these activities, Imperial Oil maintained a healthy financial position, with a strong emphasis on returning capital to shareholders through dividends.
Key Highlights
- 1Net income for the nine months ended September 30, 2012, increased to $2.69 billion, a 13.7% rise from $2.37 billion in the prior year, with diluted EPS growing to $3.16 from $2.77.
- 2The Downstream segment reported record quarterly and year-to-date net income, driven by strong mid-continent industry refining margins.
- 3Upstream segment net income declined primarily due to lower Syncrude and natural gas realizations, as well as increased Kearl production readiness expenditures.
- 4Capital expenditures were heavily focused on the Kearl project, with the initial development 98% complete and expansion 20% complete as of September 30, 2012.
- 5Cash flow from operating activities decreased year-over-year for both the quarter and the nine-month period, impacted by working capital movements and tax payments.
- 6The company's long-term debt increased by $150 million, and short-term debt by $75 million, primarily to fund capital investments.
- 7Dividends paid increased to $102 million in Q3 2012 from $93 million in Q3 2011, with year-to-date dividends per share rising to $0.36 from $0.33.