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Suncor Energy Q4 FFO Down

Suncor Energy reported that its funds from operations were C$2.007 billion or C$1.26 per share in the fourth quarter of 2018, compared to C$3.016 billion or C$1.83 per share in the fourth quarter of 2017, and were influenced by the same factors impacting operating earnings, excluding the recovery of non-cash share-based compensation, as well as unrealized gains on crude optimization activities.

Suncor's fourth quarter 2018 operating earnings were C$580 million or C$0.36 per share, compared to C$1.310 billion or C$0.79 per share in the prior year quarter. The decrease was primarily a result of unfavourable western Canadian crude oil differentials, including a substantial widening of synthetic crude oil (SCO) differentials. Analysts polled by Thomson Reuters expected the company to report earnings of C$0.71 per share. Analysts' estimates typically exclude special items.

The net loss was C$280 million or C$0.18 per share in the fourth quarter of 2018, compared to net earnings of C$1.382 billion or C$0.84 per share in the prior year quarter. Net loss for the fourth quarter of 2018 included a C$637 million unrealized after-tax foreign exchange loss on the revaluation of United States (U.S.) dollar denominated debt, as well as a non-cash impairment loss on one of the company's equity investments.

Net earnings in the prior year quarter included a net C$124 million deferred income tax recovery related to a decrease in the U.S. corporate tax rate from 35% to 21%, an unrealized after-tax foreign exchange loss of C$91 million on the revaluation of U.S. dollar denominated debt, after-tax property damage insurance proceeds of C$55 million, an after-tax loss of C$18 million for early repayment of debt and a net after-tax gain of C$2 million on interest rate swaps associated with debt issued in the fourth quarter of 2017.

Suncor's Board of Directors approved a quarterly dividend of C$0.42 per share, an increase of 17%, and also approved a further share repurchase program of up to C$2.0 billion.

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