CALGARY — 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 board and a review of its executive 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."
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 prior year quarter.
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.
This report by The Canadian Press was first published May 10, 2022.
Companies in this story: (TSX:SU)
Amanda Stephenson, The Canadian Press