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Husky reports $71M Q1 profit, cites market uncertainty in dividend restart delay


CALGARY — Husky Energy says the company will continue to delay reinstating its dividend because of uncertainty in the oil markets and recently slumping world crude prices.

Some analysts had predicted the Calgary-based energy company would use the release of its first-quarter results Friday to reinstate the dividend it cancelled in late 2015 because of low oil prices.

However chief executive Rob Peabody said while Husky (TSX:HSE) has its net debt under control and is generating enough free cash flow, it's unclear whether commodity prices going forward will support a sustainable dividend.

"There's uncertainty around whether an extension of the OPEC (Organization of Petroleum Exporting Countries) cuts, if in fact they are extended, will be enough to offset the impact of growing U.S. shale production," Peabody said.

"In short, the market's not yet stable or in balance."

Peabody said he's also concerned about whether President Donald Trump's administration will erect trade barriers to Canadian oil exports to the U.S.

Benchmark West Texas Intermediate oil prices have fallen from just under US$55 per barrel to just over US$46 dollars in the past month.

In a report earlier this week, GMP FirstEnergy commodity analyst Martin King said oil prices "continue to trend sideways" as traders are confused over whether oil inventories in the U.S. and around the world will tighten and lead to higher oil prices.

Husky said Friday it earned $71 million or six cents per share in the first quarter on higher commodity prices and improved refining margins, versus a loss of $458 million or 47 cents per share a year ago.

Gross revenue totalled $4.58 billion, up from $2.68 billion a year ago.

Production in the quarter averaged 334,000 oil-equivalent barrels per day.

 

Follow @HealingSlowly on Twitter.

Dan Healing, The Canadian Press



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