The likelihood of a reduction later was deemed very high, given the market rout, so Suncor decided to make the cash available, he said. Suncor Energy Inc. chief executive Mark Little says cutting the company’s prized dividend would have been inconceivable just three months ago. Analysts estimated a loss of 34 cents, on average. Canadian Natural is scheduled to report its results on Thursday. All rights reserved. Suncor’s dividend cut may be “priced into the stock” after Shell announced a similar action last week, with shares of Suncor lagging in a similar fashion.
Non-subscribers can read and sort comments but will not be able to engage with them in any way. Your time is valuable. Suncor said that as of March 31, it had $8.1 billion in liquidity. The company yet again cut its capital spending from $4.2 billion to $3.8 billion for the current year.
This translation has been automatically generated and has not been verified for accuracy. Comments may take up to an hour for moderation before appearing on the site. However, the cut was expected and in line with the industry trends, hinting that the energy industry is in deep waters.
Unauthorized distribution, transmission or republication strictly prohibited. Visit our Community Guidelines for more information and details on how to adjust your email settings. And this is very prudent in managing the financial strength of the company so that we can keep the company strong through this and not continue to take on debt,” Mr. Little told analysts in a conference call on Wednesday. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada. If you don't see it please check your junk folder. This is a space where subscribers can engage with each other and Globe staff.
It also seems like we have seen oil’s bottom and a big rally is in the making.
Thank you for your patience. As oil prices plunged to record-low levels, the companies are instigating methods like dividend cuts and reduced capital spending to retain cash. Energy demand has declined to notoriously low levels amid the pandemic-driven lockdowns in an already oversupplied market. © Copyright 2020 The Globe and Mail Inc. All rights reserved. The virus is affecting Suncor's maintenance work, too. Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Suncor is the first to cut among a trio of large, well-funded Canadian oil producers with records of steadily increasing dividends that had been seen as iron-clad. This is a space where subscribers can engage with each other and Globe staff. Suncor’s Dividend Reinvestment and Optional Common Share Purchase Plan . We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Suncor may have cut its dividend too soon: Money manager .
“It’s one of those things that no one would have expected prior to this downturn, but this is a sign of how severe this is,” he said. “Ultimately, the dividend cut saves SU roughly C$1.5 billion per year, which is on top of a C$400 million cut in its capex.” I understand I can unsubscribe from these updates at any time. “Given this incredible circumstance that’s having huge global implications, we view this as very important that we be pro-active.
However, Suncor Energy’s downstream operations will play a more vital role when oil consumption will rise in the post-COVID-19 period, particularly if oil prices remain low. It’s important to note that even if lockdown and travel restrictions are lifted, it will take time to get things back to normal. Among global oil majors, Royal Dutch Shell PLC last week reduced its dividend for the first time since the Second World War, citing the drop in fuel consumption brought on by restrictions on movement to combat COVID-19. However, long-term investors should not make their investment decisions on a couple of weak quarters. That means: Comments that violate our community guidelines will be removed. © 2020 The Motley Fool Canada, ULC. The board also cut the company’s quarterly dividend to 21 cents a share, from 46.5 cents. The Suncor Refinery in Edmonton is seen on April 29, 2014. In the first quarter, Suncor was able to shift output to higher priced light crude and its refined-product mix to higher-value distillate. The moves helped the company post a better-than-expected loss, excluding some items, of 20 cents a share.
Thus, lower crude oil prices for longer will make the case bleaker for these energy companies. Suncor Energy deepens spending cuts, slashes quarterly dividend, Traders risk getting ahead of themselves with oil price gains, Marathon Petroleum runs plants at minimums but sees creep in gasoline demand, Unchecking box will stop auto data updates, Due to technical reasons, we have temporarily removed commenting from our articles. The Motley Fool Canada » Energy Stocks » Should You Buy Suncor Energy (TSX:SU) After its Steep Dividend Cut? Audio for this article is not available at this time. That’s a significant fall from close to 8% levels earlier. The company’s share price fell 3.4 per cent to $22.50 on the Toronto Stock Exchange on Wednesday. © 2020 Financial Post, a division of Postmedia Network Inc. All rights reserved. Suncor Energy pays out -42.77% of its earnings out as a dividend. This is your chance to get in early on what could prove to be very special investment advice.
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