Imperial Oil swings to profit in first quarter

CALGARY • Imperial Oil Ltd posted a first-quarter profit and raised its quarterly dividend on Friday, bolstered by higher crude prices, as well as improved refining and chemical margins.

Calgary-based Imperial, which is majority-owned by Exxon Mobil Corp, is benefiting from higher global oil prices as fuel usage picks up from last year, when lockdowns intended to stop the spread of COVID-19 decimated demand.

The recovery, however, remains spotty with second and third waves of COVID-19 surging in various parts of the world, including Canada, and an uneven rollout of vaccines.

The lingering effects of the weak 2020 business environment continues to have a negative impact on financial results in 2021 when compared to periods prior to the pandemic, Imperial said.

“Since we entered 2021 we have seen lower than normal product demand but have seen commodity prices and product markets strengthen,” said Imperial chief executive Brad Corson, adding there would be continued volatility and continued uncertainty.

Imperial posted a profit of $392 million, or 53 cents per share, for the quarter ended March 31, compared to a loss of $1.15 billion, or $1.56 per share, in the previous quarter. The company boosted its dividend by 23 per cent to 27 cents per share.

Upstream production averaged 432,000 gross oil-equivalent barrels per day, the highest first quarter production in 30 years. Total gross production at Kearl, Imperial’s huge oilsands mine in northern Alberta, averaged 251,000 bpd.

Refinery throughput and product sales were lower than in the same period a year earlier due to the impact of the pandemic, but net income from chemicals rose to $67 million in the quarter, up from $21 million in the first quarter of 2020.

Imperial shares jumped, adding 4.78 per cent to $35.50 in Toronto trading on Friday.

Exxon, meanwhile, topped Wall Street quarterly earnings estimates with its first profit in five quarters, boosted by higher oil prices and strong chemicals margins.

Earnings from Exxon and rivals this year have been rising with crude oil prices, up by a third this year, as a global oil surplus from the pandemic drains and fuel demand recovers. The swing to a profit comes as European rivals also posted results that exceeded pre-pandemic levels.

Quarterly results show Exxon’s deep cost cuts have allowed it to turn the corner on last year’s historic annual loss and deliver strong cash flow need to reduce debt. Exxon is fighting a hedge fund’s over board seats and its fossil fuel direction.

Net income was US$2.73 billion, or 64 cents per share, in the first quarter, compared with a loss of US$610 million, or 14 cents per share, a year earlier.