July 22, 2009 / 10:06 PM / 8 years ago

UPDATE 1-Husky Energy profit sinks with oil prices, output

* Q2 EPS C$0.51 vs C$1.60

* Cash flow per shr C$0.98 vs C$2.45

* Production down 12 percent at 317,200 boe/d

CALGARY, Alberta, July 22 (Reuters) - Second-quarter profit at Husky Energy Inc HSE.TO tumbled 68 percent as oil and gas prices fell and refining returns shrank with the downturn in the economy, the Canadian energy producer said on Wednesday.

Husky, the oil producer and refiner controlled by Hong Kong billionaire Li Ka-shing, earned C$430 million ($390 million), or 51 Canadian cents a share, down from year-earlier C$1.36 billion, or C$1.60 a share.

Excluding unusual items, adjusted net income in the period was C$471 million, or 55 Canadian cents a share, the company said.

Analysts, on average, had expected the company to earn 33 Canadian cents a share, according to Reuters Estimates.

Cash flow, a glimpse into an oil company’s ability to fund drilling and other projects, fell 60 percent to C$833 million, or 98 Canadian cents a share, from C$2.1 billion, or C$2.45 a share.

Husky and its oil industry rivals have suffered big drops in profit as U.S. crude averaged $59.79 a barrel in the quarter, down 52 percent from a year earlier, as the recession chewed into energy demand.

Canadian natural gas prices averaged C$3.28 a gigajoule, down 66 percent, as inventories swelled.

Husky said its production in the quarter averaged 317,200 barrels of oil equivalent a day, down 12 percent from 359,100 in 2008, as it conducted maintenance at its Canadian East Coast oil fields and chopped spending on natural gas operations due to low prices.

Husky, which has sketched out plans to spin off its Asian operations into a separate company, said its results were also hampered by deterioration in refining margins.

Husky shares closed up 20 Canadian cents to C$32 on the Toronto Stock Exchange on Wednesday, before the results were released. Interests controlled by Li own more than 70 percent of Husky’s stock.

$1=$1.10 Canadian Reporting by Jeffrey Jones; editing by Rob Wilson

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