Suncor Q1 results – solid results, doubling of the buyback

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Mining Dump Trucks, Aerial Photo

dan_prat/iStock by means of Getty Pictures

Suncor (SU) produced Q1 final results after the current market close Monday, beating earnings expectations, building sturdy free funds stream and doubling the Firm’s share repurchase authorization:

  • Earnings – altered Q1 earnings came in at C$1.92 for each share, vs . Avenue anticipations for C$1.70.
  • Funds stream – the Business created C$3.1b in free cash circulation during the quarter, or ~4.7% of the marketplace cap.
  • Capital allocation – the board raised the dividend 12% to 47c per share (4.2% generate) and repurchased C$827m in shares for the duration of the quarter (~1.3% of shares), whilst minimizing net debt by C$728m the share buyback was doubled to 10% of shares outstanding, and management is now pursuing a sale of its British isles e&p company (in addition to wind and Norway e&p assets).
  • Guidebook – management expects to gain an supplemental C$400m in totally free dollars movement through 2022 as a result of charge saving initiatives commodity price assumptions for 2022 have been increased, as were cost and royalty forecasts.

Suncor (SU) has been a laggard in the sector, given that the pandemic-linked price tag crash led management to reduce the dividend. Considering that, a sequence of operational missteps have led to security issues and lousy dollars circulation supply. New will increase in shareholder returns, as nicely as introduced shareholder activism, have lessened many of the strategic fears. In Q2, an historic turnaround at Firebag and coker maintenance at the foundation mine will be a big examination for management. If they can continue to keep the refineries jogging very well, and produce turnarounds on time and finances, Suncor (SU) is positioned to outperform in 2022.

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