By Scott Haggett
CALGARY, Alberta, Feb 12 (Reuters) - Husky Energy Inc , Canada’s third-largest integrated oil producer, said on Wednesday it made the first major sale of Canadian crude oil to India in the fourth quarter, even as its profit in the period dropped on weak refining results.
The company, controlled by Hong Kong billionaire Li Ka-shing, sold 1 million barrels of crude oil from its White Rose field, off the coast of Newfoundland, in the quarter to state-owned refiner Indian Oil Corp.
The sale is the first substantial shipment of Canadian crude to the subcontinent, giving the company a new customer for its offshore production as North American refiners increase their use of cheaper inland oil. The light oil from the field can now be used in all the Indian refiner’s facilities.
“This was a test sale of a certain quality of crude,” Asim Ghosh, Husky’s chief executive, said on a conference call. “We are now qualified for the state-owned (refining) sector in India.”
Husky said net income in the fourth quarter of 2013 fell to C$177 million ($160.28 million), or 18 Canadian cents per share, from C$474 million, or 48 Canadian cents, a year earlier.
Adjusted earnings, which exclude most one-time and unusual items, fell 15 percent to C$412 million, or 42 Canadian cents per share, but beat the average analyst estimate of 38 Canadian cents per share, according to Thomson Reuters I/B/E/S.
The company said the drop came as profit margins fell at its U.S. refining operations. The gross profit for refining a barrel of crude oil fell to $6.94 in the quarter, compared with $16.19 in the fourth quarter of 2012.
The company’s cash flow, a measure of its ability to pay for new projects and drilling, declined 19 percent from a year ago to C$1.14 billion, or C$1.16 per share.
U.S. crude futures averaged $97.46 per barrel in the quarter, compared with $88.18 a year ago.
Husky shares were up 46 Canadian cents to C$33.42 by midday on the Toronto Stock Exchange.