Updated Version 2 - Driven by rising oil prices and improved margins, Suncor Energy's profits exceeded expectations

The full text has been supplemented with detailed information and background

Reuters, November 3 - Canadian integrated oil and gas producer Suncor Energy SU.TO posted third-quarter profit that exceeded analysts’ expectations on Tuesday, as rising oil prices and stronger refining margins helped offset lower output and processing volumes.

The Iran war (link) has entered its ninth month, disrupting global energy supplies and pushing up crude prices. This quarter, benchmark Brent crude averaged $89.27 per barrel, up 31% from the same period last year.

Integrated oil companies such as Imperial Oil IMO.TO and Suncor have benefited from the global fuel market turmoil sparked by the war, with rising oil prices boosting profitability on both the production and refining sides.

Last week, Imperial Oil IMO.TO also topped analyst estimates for quarterly earnings, supported by strong refining margins.

https://www.reuters.com/graphics/SUNCORENERGY-SHARES/RESULTS/lbpgxeqwevq/chart.png

This quarter, Suncor reported declines in both upstream production and processing volumes. However, rising oil prices pushed oil sands production revenue to grow by 32% to C$9.32 billion (US$6.66 billion).

Revenue from its refining business soared more than 65% to about C$13.4 billion, supported by a more than doubling of benchmark crack spreads, significantly increasing profits from processing each barrel of crude oil.

The Calgary, Alberta-based company's upstream output fell by 2% to 852,500 barrels per day, while refinery throughput edged down slightly to 487,700 barrels per day.

Suncor announced it will pay a quarterly dividend of 66 Canadian cents per share on December 24, up 10% from the previous quarter.

In October, Suncor agreed to sell (link) its interests in three Canadian offshore oil assets to Ithaca ITH.L for C$1.2 billion and raised its monthly share repurchases from C$500 million to C$750 million starting in October.

According to data compiled by London Stock Exchange Group (LSEG), the company achieved adjusted operating earnings of C$3.97 per share in the quarter ended September 30, compared with the average analyst estimate of C$3.28 per share.

(US$1 = C$1.3998)

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