Update 2 - Imperial Oil’s profits exceed expectations, boosted by improved refining margins

Full details have been added

Reuters, October 30 - Canadian energy company Imperial Oil IMO.TO reported third-quarter adjusted profit on Friday that exceeded Wall Street expectations, mainly thanks to stronger refining margins that drove a sharp increase in downstream business profit, offsetting the impact of declining crude production.

The Iran conflict has disrupted energy exports through the Strait of Hormuz, while attacks on Middle Eastern and Russian infrastructure have tightened global fuel supply, boosting refining margins for integrated producers.

These supply disruptions have caused prices for diesel, gasoline, and jet fuel to rise relative to crude oil prices, thus expanding refining margins.

During the July to September quarter, the benchmark Brent crude averaged about $89.27 per barrel, up more than 31% from the same period last year.

Imperial Oil's third-quarter downstream business profit rose to C$1.56 billion ($1.12 billion) from C$444 million a year earlier, reflecting improved refining margins and a more favorable product mix.

https://www.reuters.com/graphics/IMPERIALOIL-RESULTS/SHARES/jnvwoomgdvw/chart.png

Due to unplanned outages, third-party pipeline disruptions, and planned maintenance activities, total throughput (i.e., crude oil processed) in the third quarter dropped to 381,000 barrels per day from 425,000 barrels per day a year earlier.

Driven by increased export sales, oil product sales climbed to 474,000 barrels per day from 464,000 barrels per day in the same period last year.

This quarter, average total upstream production was 418,000 barrels of oil equivalent per day (boepd), down from 462,000 boepd a year ago, mainly due to production declines at its three Alberta assets and planned maintenance activities.

The company also lowered its 2026 production target for the Kearl oil sands mine to 280,000 barrels per day (gross production), citing the impact of third-party disruptions on production earlier this year.

Controlled by U.S. oil giant ExxonMobil (XOM.N), Imperial Oil returned C$2.51 billion to shareholders this quarter through dividends and share buybacks.

According to LSEG compiled data, the Calgary, Alberta-based company posted adjusted net earnings per share of C$5.11 in the quarter ended September 30, ahead of analysts' average forecast of C$4.70 per share.

(US$1 = C$1.3959)

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