Scotiabank says Suncor Energy’s challenges will need time to fix even with new CEO

Scotiabank downgrades Canada’s Suncor Energy Inc to “sector perform” from “sector outperform.”

Brokerage says new CEO Rich Kruger will have a fresh approach to some of SU’s operational issues over the past few years but “there is still plenty of work to do.”

Highlights challenges like safety, minimizing downtime, reducing operating costs and replacing production at aging mines.29dk2902l

SU said last month that former Exxon Mobil Corp executive Rich Kruger will be its chief executive from April 3, replacing interim boss Kris Smith.

“The lack of clarity on future capital costs necessary to replace the Base Plant production continues to weigh on the stock. While we believe SU has ample resource and available FCF to fund capex, its simply a question of magnitude and the corresponding impact on shareholder returns” – Scotiabank.