Imperial Oil profit surges 26 percent on crude prices

Tue Jan 31, 2012 2:12pm EST
 
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By Scott Haggett

CALGARY, Alberta (Reuters) - Imperial Oil Ltd (IMO.TO: Quote) reported a sharply higher quarterly profit on Tuesday, thanks to stronger crude prices and an improved performance at its refining operations, and boosted its dividend by more than 9 percent.

Canada's No. 2 oil producer and refiner, majority owned by U.S. major Exxon Mobil Corp (XOM.N: Quote), said fourth-quarter net income rose 26 percent to C$1.01 billion ($1.01 billion) or C$1.18 a share, from C$799 million, or 94 Canadian cents, a year earlier.

That topped the average analyst estimate of 89 Canadian cents a share as compiled by Thomson Reuters I/B/E/S.

The company's revenue rose 17 percent to C$8.12 billion.

Imperial is the first of Canada's big energy companies to report earnings in a quarter marked by robust oil prices. While the company's oil and gas operations did very well, its refining operations were more profitable than expected.

"The surprise was the downstream (refining and marketing operations), said Andrew Potter, an analyst with CIBC World Markets. "They had really strong earnings despite reliability that was only so-so."

Imperial's four Canadian refineries are capable of processing more than 500,000 bpd of crude but handled just 433,000 bpd in the quarter due to maintenance shutdowns at some of its facilities.

Despite the reduced output, earnings from refining operations rose as the margin, the profit made on refining a barrel of crude and selling it to retail customers, strengthened. Overall, Imperial's refining and market contributed C$272 million the company's profit, 2.3 percent more than the year-prior quarter.   Continued...