Suncor uninterested in selling Petro-Canada, CEO says despite shareholder pressure
![Suncor, Mark Little, Suncor president and CEO Mark Little prepares to address the company's annual meeting in Calgary on May 2, 2019. Suncor Energy Inc. is not interested in selling off its Petro-Canada retail network, the oil giant's chief executive said Tuesday, in spite of pressure from an aggressive activist investor. Jeff McIntosh/The Canadian Press](/content/dam/ctvnews/en/images/2022/5/10/suncor--mark-little--1-5896806-1652206894162.jpg)
Suncor Energy Inc. is not interested in selling off its Petro-Canada retail network, the oil giant's chief executive said Tuesday, in spite of pressure from an aggressive activist investor.
Speaking publicly for the first time since U.S.-based Elliott Investment Management called for changes to Suncor's leadership as well as the possible sale of Petro-Canada, company CEO Mark Little told analysts that the 1,800-location retail chain is a key element of Suncor's business.
"It's intertwined with our wholesale and industrial business as well," Little said during a conference call to discuss the company's first quarter financial results.
"(Petro-Canada) is a very strong performer and can go head-to-head with other retail businesses ... We think we have the best downstream business in North America, and we think it's important that it stays together."
The recent proposal by Elliott — a well-known activist investor that holds a 3.4 per cent economic interest in Suncor and which has a track record of targeting large corporations it views as underperformers — had the Calgary-based oil producer on the defensive on Tuesday's call.
Elliott has been critical of Suncor's lagging share price as well as a recent spate of operational difficulties and workplace safety incidents, and analysts wanted to know how the company is responding to these concerns.
But Little pointed to Suncor's first quarter profits of $2.95 billion in the first quarter — up from $821 million in the same period of 2021 — as well as the highest quarterly cash flow in the company's history as proof that Suncor is on the right track.
"While we still have work to do, I'm pleased to report that we're making progress and that all parts of Suncor are shifting into high gear," Little said.
"Our board and management have great confidence in our plan and the progress we're making."
Suncor, which was the most valuable Canadian energy company by market capitalization from 2000 until 2018, has been in a slump recently. The company's share price has lagged that of its closest oilsands peer, Canadian Natural Resources Ltd., by 137 per cent over the last three years, according to a letter from Elliott to Suncor's board.
The company has also reported 12 workplace deaths since 2014, and struggled with production issues related to equipment failure and weather.
But Little said Tuesday Suncor is already making changes, including a third-party safety review, bringing on new management including former LNG Canada CEO Peter Zebedee (now Suncor's executive vice-president of mining and upgrading), and incorporating new fatigue management and collision avoidance technology at its oilsands sites to reduce risk to workers and contractors.
"We know we've had challenges in our mines, and we've taken concrete actions since the fall of last year to strengthen our mining capability," Little said, adding Suncor will host an "oilsands operational presentation" on July 13 to update investors on the changes it is making in support of safe and reliable operations.
The company is also streamlining its business, including with last month's annoucement that it would divest its wind and solar assets. On Tuesday, Little said the company has had a "massive response" from prospective buyers.
"So much so that it's slowing down the process because we've had to process so many different inquiries associated with it," he said.
The company also plans to divest its exploration and production assets in Norway and is exploring the sale of its entire U.K. portfolio.
On Monday, Suncor declared a quarterly dividend of 47 cents per common share payable June 24 to shareholders of record as of June 3. The company says the dividend is the highest in the company's history and 12 per cent higher than the previous quarter's dividend.
The company's net earnings amounted to $2.06 per common share, compared to 54 cents per common share in the first quarter of last year.
Revenues were $13.5 billion, up from $8.6 billion in the prior quarter.
Suncor reported total upstream production of 766,100 barrels of oil equivalent per day (boe/d) in the first quarter of 2022, compared to 785,900 boe/d in the same quarter last year.
Refinery crude throughput increased to 436,500 barrels per day and refinery utilization was 94 per cent in the first quarter of 2022, compared to 428,400 barrels per day and 92 per cent in the prior year quarter.
ATB Financial analyst Patrick O'Rourke said in a research note Tuesday that Suncor's first quarter results were "modestly ahead of expectations," but added investor eyes continue to be on Elliott and its next move.
"Frankly, while operational and financial performance in the quarter trended to the positive side of the ledger, we believe investors will focus most closely on the quarterly earnings call and any questions or commentary that relate directly to the recent activist investor presentation and concerns," O'Rourke said.
Suncor shares were trading at $44.30 on the Toronto Stock Exchange mid-day Tuesday, down 2.16 per cent.
This report by The Canadian Press was first published May 10, 2022
CTVNews.ca Top Stories
![](https://www.ctvnews.ca/polopoly_fs/1.6995422.1723237575!/httpImage/image.jpg_gen/derivatives/landscape_800/image.jpg)
NDP calls for an investigation into bot posts about Poilievre rally
NDP MP Charlie Angus has asked the Commissioner of Canada Elections to probe a number of posts on social media, worried they may constitute foreign interference.
Families of Brazilian plane crash victims gather in Sao Paulo as experts work to identify the dead
Families of victims of an airliner crash in Brazil are gathering Sunday at a morgue and hotels in Sao Paulo as forensics experts work to identify the remains of the 62 people killed in the accident.
Ukraine's Zelenskyy indirectly confirms daring military incursion onto Russian soil
Days after Ukraine began a surprise military incursion into Russia's Kursk border region, Zelenskyy broke the government's silence on it late Saturday by indirectly acknowledging ongoing military actions to 'push the war out into the aggressor's territory' in his nightly address.
Israel broadens its evacuation orders after deadly strike on Gaza school-turned-shelter
The Israeli military ordered more evacuations in southern Gaza early Sunday after a deadly airstrike on a school-turned-shelter in the north killed at least 80 Palestinians, according to local health authorities. Israel said it targeted a militant command post, killing 19 fighters.
On the lookout: New Brunswick bird watcher finds his 400th species of bird
Armed with a keen eye and curiosity, Jim Wilson has watched birds in New Brunswick for decades. Recently, Wilson saw his 400th species of bird, but the search continues for the next one.
B.C. court overturns eviction of social housing tenant who owed $45 in unpaid rent
A resident of a Vancouver social housing building who was ordered to move out because of a disputed $45 rent shortage has won the right to stay, at least for now.
Old pantry staple is new again with people using it to improve fitness, disease and more. But it has risks
You may think the baking soda lurking in the back of your cupboard is only useful for absorbing gross refrigerator smells, cleaning produce or making baked goods.
'Really... THAT song?' Celine Dion disavows use of Titanic theme at Donald Trump rally
Celine Dion's management team along with her record label, Sony, took exception to and disavowed the use of her multi-award-winning song "My Heart Will Go On" at a Donald Trump/J.D. Vance rally.
Donald Trump's campaign says its emails were hacked
Former U.S. president Donald Trump’s presidential campaign said Saturday that it has been hacked and suggested Iranian actors were involved in stealing and distributing sensitive internal documents.