Summary
Imperial Oil Ltd. reported mixed financial results for the third quarter and first nine months of 2017 compared to the prior year. While net income decreased in the third quarter to $371 million ($0.44/share) from $1,003 million ($1.18/share) in Q3 2016, this was largely due to a significant gain from asset sales in the prior year's comparable quarter. Excluding this one-time gain, operational performance showed improvements, particularly in the Upstream segment, driven by higher Canadian crude oil realizations and increased production volumes at Kearl. The Downstream segment experienced lower earnings primarily due to the absence of retail site sale gains and increased turnaround activity. For the nine-month period, net income was $627 million ($0.74/share), down from $721 million ($0.85/share) in 2016, again influenced by the prior year's retail site divestiture gains. The Upstream segment showed a narrowed net loss year-over-year, benefiting from higher crude oil realizations and improved WTI/WCS differentials. The company maintained a strong liquidity position with cash and cash equivalents increasing to $833 million. Imperial Oil continued its share repurchase program and increased its dividend per share.
Key Highlights
- 1Net income for the third quarter of 2017 was $371 million ($0.44/share), a decrease from $1,003 million ($1.18/share) in Q3 2016, largely due to a significant gain from asset sales in the prior year.
- 2Upstream segment net income improved to $62 million in Q3 2017 from a net loss of $26 million in Q3 2016, driven by higher Canadian crude oil realizations and increased Kearl production.
- 3Downstream segment net income decreased to $292 million in Q3 2017 from $1,002 million in Q3 2016, mainly due to the absence of retail site sale gains and higher turnaround activity.
- 4For the first nine months of 2017, net income was $627 million ($0.74/share), down from $721 million ($0.85/share) in 2016, impacted by prior year asset sale gains.
- 5Upstream segment recorded a net loss of $225 million for the first nine months of 2017, an improvement from a net loss of $764 million in the same period of 2016.
- 6Cash flow from operating activities increased to $837 million in Q3 2017 from $772 million in Q3 2016.
- 7The company's cash balance increased significantly to $833 million as of September 30, 2017, up from $248 million at the end of Q3 2016.