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Suncor Energy Posts Q1 Loss; Halves Dividend

Suncor Energy Inc. (SU,SU.TO) reported a first-quarter net loss of C$3.525 billion or C$2.31 per share, compared to net earnings of C$1.470 billion or C$0.93 per share in the prior year quarter.

The company's results in the first quarter of 2020 were impacted by the significant weakness and volatility in commodity prices as a result of the COVID-19 pandemic and OPEC+'s initial plan to increase production.

The net loss for the first quarter of 2020 included C$1.798 billion of non-cash after-tax asset impairment charges, a C$1.021 billion unrealized after-tax foreign exchange loss on the revaluation of U.S. dollar denominated debt and a C$397 million after-tax hydrocarbon inventory write-down to net realizable value.

Operating loss was C$309 million or C$0.20 per share, compared to operating earnings of C$1.209 billion or C$0.77 per share in the prior year quarter, with the first quarter of 2020 impacted by a net FIFO inventory valuation loss of C$446 million after-tax on the declining value of refinery feedstock costs.

Funds from operations were C$1.001 billion or C$0.66 per share, compared to C$2.585 billion or C$1.64 per share in the prior year quarter.

The company said its board has decided to reduce the quarterly cash dividend by 55% to C$0.21 per common share from C$0.465 per common share. This dividend will be payable on June 25, 2020 to shareholders of record at the close of business on June 4, 2020.

In order to maintain the financial health and resiliency of the company to navigate the current market conditions, the company has reduced operating costs by C$1 billion (10%) compared to 2019 levels. It has also increased its liquidity by C$4 billion.

In addition, the company has reduced 2020 capital expenditures by C$1.9 billion (33%) compared to the original 2020 plan.

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