By Rod Nickel
WINNIPEG, Manitoba (Reuters) – Suncor Energy’s strategy of returning cash to shareholders and repaying debt with its soaring profits is sustainable even if surging crude prices pull back, the company’s chief executive said on Thursday.
The stock of Canada’s second-biggest oil producer climbed as much as 10% after it said late on Wednesday that it would double its dividend, reversing a cut made last year when lockdowns due to the COVID-19 pandemic hammered fuel demand.
Suncor is also using its cash to buy back shares and repay debt, just a year and a half after the pandemic’s spread reduced travel and generated losses for oil producers. The company reported a net profit of C$877 million ($710.58 million)for the third quarter after losing money a year earlier.
Suncor’s strategy is sustainable even if West Texas Intermediate oil prices fall to $55 per barrel, from the current price around $82, CEO Mark Little said on a quarterly call with analysts.
“The business is looking really strong,” Little said. “And when you look at consumer demand, although it’s off a bit, you’re seeing (refineries) recover and providing significant and stable cash flows.”
($1 = 1.2342 Canadian dollars)
(Reporting by Rod Nickel in Winnipeg; editing by Barbara Lewis)Internet Explorer Channel Network