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PETRO-CANADA REPORTS CASH FLOW UP AND COSTS AND DEBT DOWN

 PETRO-CANADA REPORTS CASH FLOW UP AND COSTS AND DEBT DOWN
 CALGARY, Alberta, Oct. 29 /CNW/ - Petro-Canada (Toronto, Montreal, Vancouver, Alberta: PCA) today announced results for the third quarter of 1992. The company's earnings from operations were $2 million on revenues of $1.2 billion, including gains on asset sales of $2 million. Cash flow from operations in the third quarter was $117 million, or 54 cents per share, 11 percent higher than in the same period in 1991.
 After three previously announced unusual items, the net loss in the third quarter of 1992 was $56 million or 26 cents per share. On an after-tax basis, Petro-Canada recorded a $28 million gain from the sale of Petro-Canada's 27 percent interest in Internationale de Services Industriels et Scientifiques, a $56 million loss from the sale of the company's 37 percent interest in Westcoast Energy Inc. and a $30 million charge to earnings related to the prepayment of government-supported long-term debt.
 The company had earnings from operations for the first nine months of 1992 of $82 million, including gains on asset sales of $25 million. After unusual items, the net loss over nine months was $18 million or 8 cents per share. Cash flow from operations during the first nine months was up 75 percent from a year earlier at $361 million, or $1.67 per share.
 Debt net of cash and short-term deposits at Sept. 30, 1992, was $1.210 million, down 46 percent from the $2.256 million level immediately prior to privatization in July 1991.
 Chairman and Chief Executive Officer W.H. Hopper said, "We are encouraged to see continuing strength in cash flow from operations. We have eliminated $219 million of ongoing operating and overhead costs so far this year. We have also significantly strengthened our balance sheet -- we have cut more than $1 billion from the level of debt we had before privatization in July 1991."
 Effective Jan. 1, 1992, Petro-Canada changed to the last-in, first-out ("LIFO") from the first-in, first-out ("FIFO") method of accounting for crude oil and product inventories. The change had no effect on earnings or cash flow from operations in the third quarter. For the first nine months of 1992, the effect of this change was to increase net earnings by $6 million and cash flow from operations by $10 million.
 The results compared with a net loss in the third quarter of 1991 on the FIFO method of $85 million, or 40 cents per share, on revenues of $1.2 billion. Cash flow from operations was $105 million during the third quarter of 1991, or 49 cents per share. The 1991 third- quarter results included a $95 million after-tax writedown related to Petro-Canada's interest in the Syncrude oil sands project.
 Resources division earnings from operations in the third quarter of 1992 nearly doubled to $27 million, from $14 million in 1991. The division's 1992 results include gains on asset sales of $3 million. Improved earnings resulted primarily from lower operating and overhead costs and higher natural gas sales volumes. Nine-month earnings from operations in 1992 were $116 million, including $25 million of gains from asset sales. In the first nine months of 1991, earnings from operations were $15 million, including a loss from asset sales of $5 million. The net loss after unusual items for 1991 was $80 million.
 Products division earnings from operations were $7 million in the third quarter of 1992. The division's earnings from operations in the third quarter of 1991 were $30 million on a FIFO basis, including gains on asset sales of $4 million. Reduced operating and overhead expenses were more than offset by lower margins, especially in operations in Central and Eastern Canada. Nine-month earnings from operations were $16 million in 1992, compared with a loss of $96 million on a FIFO basis in 1991. The net loss after unusual items in 1991 was $106 million.
 Corporate and other net expenses in the third quarter of 1992, before unusual items, were $32 million, down from $34 million in the same period of 1991. Nine-month net expenses from operations were $50 million in 1992 and $48 million in 1991. The net loss after unusual items in 1992 was $150 million.
 Expenditures on property, plant and equipment and exploration were $88 million in the third quarter of 1992 and full-year expenditures are planned at about $500 million.
 The board of directors has declared a quarterly dividend of 3.25 cents per share payable on Jan. 1, 1993, to shareholders of record on Dec. 3, 1992.
 PETRO-CANADA
 Selected Financial Data
 (Unaudited, millions of dollars)
 Third Quarter Nine Months
 1992 1991 1992 1991
 Revenue
 Resources 241 250 738 776
 Products 1,060 1,074 2,950 3,178
 Corporate and Other 66 72 234 274
 Inter-segment sales (158) (172) (454) (493)
 Total 1,209 1,224 3,468 3,735
 Net earnings (loss)
 Resources
 -- from operations 27 14 116 15
 -- writedown of investment in
 Syncrude --- (95) --- (95)
 Total 27 (81) 116 (80)
 Products
 -- from operations 7 30 16 (96)
 -- restructure and
 reorganization --- --- --- (10)
 Total 7 30 16 (106)
 Corporate and Other
 -- from operations (32) (34) (50) (48)
 -- restructure and
 reorganization --- --- (39) ---
 -- loss on retirement of
 long-term debt (30) --- (33) ---
 -- loss on disposal of
 investments (28) --- (28) ---
 Subtotal (90) (34) (150) (48)
 Total (56) (85) (18) (234)
 Cash flow from operations
 Resources 79 54 249 235
 Products 51 58 153 (8)
 Corporate and Other (13) (7) (41) (21)
 Total 117 105 361 206
 Expenditures on property, plant
 and equipment and exploration
 Resources 63 71 211 243
 Products 21 82 47 200
 Corporate and Other 4 6 9 15
 88 159 267 458
 Selected Operating Data
 Third Quarter Nine Months
 1992 1991 1992 1991
 Crude oil and field natural
 gas liquids production, net
 before royalties (thousands
 of barrels per day)
 Conventional crude oil 42.9 47.1 43.2 49.8
 Synthetic and bitumen 20.5 33.7 24.3 30.6
 Field natural gas liquids 12.6 10.9 12.6 11.7
 Total 76.0 91.7 80.1 92.1
 Natural gas liquids production
 from straddle plants including
 ethane (thousands of barrels
 per day) 31.1 35.0 36.0 37.0
 Natural gas production, net
 before royalties (millions of
 cubic feet per day) 493.9 414.6 502.4 510.6
 Sulfur production, net before
 royalties (thousands of tons
 per day) 0.8 1.3 1.0 1.3
 Petroleum product sales
 (thousands of cubic meters
 per day)
 Gasolines 21.8 21.7 20.8 19.9
 Distillates 14.2 13.7 14.2 14.4
 Other, including
 petrochemicals 9.8 8.4 8.1 7.4
 Total 45.8 43.8 43.1 41.7
 Crude oil processed by
 Petro-Canada (thousands of
 cubic meters per day) 45.3 44.7 41.9 40.4
 Average refinery utilization
 (percent) 79 77 73 73
 Propane sales (millions of
 liters) 276 261 868 879
 PETRO-CANADA
 Consolidated Statement of Earnings
 (unaudited, millions of dollars)
 Third Quarter Nine Months
 1992 1991 1992 1991
 Revenue
 Operating 1,185 1,195 3,342 3,626
 Investment and other income 24 29 126 109
 Total 1,209 1,224 3,468 3,735
 Expenses
 Crude oil and product purchases 646 559 1,716 1,928
 Producing, refining and marketing 324 385 971 1,172
 General and administrative 56 66 179 230
 Exploration 11 23 35 79
 Depreciation, depletion and
 amortization 95 97 292 303
 Taxes other than income taxes 16 17 49 50
 Interest on long-term debt 29 35 96 99
 Other interest 6 10 (1) 59
 Total 1,183 1,192 3,337 3,920
 Earnings (loss) before
 undernoted items 26 32 131 (185)
 Unusual Items
 Restructure and reorganization --- --- (60) (18)
 Loss on retirement of long-term
 debt (47) --- (53) ---
 Loss on disposal of investments (8) --- (8) ---
 Writedown of investment in
 Syncrude --- (138) --- (138)
 Total (55) (138) (121) (156)
 Earnings (loss) before
 income taxes (29) (106) 10 (341)
 Provision for (recovery of)
 income taxes 27 (21) 28 (107)
 Net loss (56) (85) (18) (234)
 PETRO-CANADA
 Consolidated Statement of Retained Earnings
 (unaudited, millions of dollars)
 Third Quarter Nine Months
 1992 1991 1992 1991
 Retained earnings (deficit)
 at beginning of period, as
 previously reported (685) (171) (634) 9
 Adjustment for the cumulative
 effect of change in accounting
 policy on prior periods (a) --- --- (75) ---
 Retained earnings (deficit) at
 beginning of period, as
 restated (685) (171) (709) 9
 Net loss (56) (85) (18) (234)
 Dividends on common shares (7) (7) (21) (38)
 Retained earnings (deficit) at
 end of period (748) (263) (748) (263)
 (a) Change in Accounting Policy
 Effective Jan. 1, 1992, the company changed from the first-in, first-out ("FIFO") method to the last-in, first-out ("LIFO") method of determining cost of crude oil and product inventories. The change was made to more closely match current costs with current revenues in the determination of the results of the company's operations. This change in accounting policy has been adopted retroactively but individual prior periods have not been restated because the effects of the change on such period are not reasonably determinable. Accordingly, the deficit has been increased by $75 million to reflect the cumulative effect of the change on prior periods, and inventories and deferred income taxes have been reduced by $130 million and $55 million, respectively, as at Jan. 1, 1992.
 PETRO-CANADA
 Share Information
 (unaudited, stated in dollars)
 Third Quarter Nine Months
 1992 1991 1992 1991
 Net loss per share (0.26) (0.40) (0.08) (1.25)
 Cash flow from operations per
 share 0.54 0.49 1.67 1.10
 Dividends per share (b) 0.0325 0.0325 0.0975 0.0325
 Share Price (c) -- High 10 13 1/8 10 7/8 ---
 -- Low 7 7/8 10 7/8 7 7/8 ---
 -- Close at
 Sept. 30 9 1/2 11 1/8 9 1/2 ---
 Average shares outstanding
 (millions) 216.1 215.3 215.6 ---
 Shares traded (d) (millions) 7.2 15.5 20.4 ---
 (b) Subsequent to the Ini on the Toronto Stock Exchange.
 (c) Share prices are trading on the Toronto Stock Exchange.
 (d) Total shares traded on the Toronto, Montreal, Vancouver,
 Alberta and Winnipeg stock exchanges.
 PETRO-CANADA
 Consolidated Statement of Changes in Financial Position
 (unaudited, millions of dollars)
 Third Quarter Nine Months
 1992 1991 1992 1991
 Operating activities
 Net loss (56) (85) (18) (234)
 Items not affecting cash flow
 from operations 162 167 344 361
 Exploration expenses 11 23 35 79
 Cash flow from operations 117 105 361 206
 Decrease in advances on future
 natural gas deliveries --- (3) (9) (9)
 Decrease (increase) in operating
 working capital 20 (32) 10 (10)
 Total 137 70 362 187
 Investing activities
 Expenditures on property, plant
 and equipment and exploration (88) (159) (267) (458)
 Proceeds from sale of property,
 plant and equipment 58 70 228 126
 Decrease in investments, net 349 7 346 66
 Increase in other assets, net (3) (6) (10) (13)
 Total 316 (88) 297 (279)
 Financing activities and dividends
 Proceeds from issue of
 long-term debt --- --- 100 ---
 Increase (decrease) in bank loan 50 (79) 50 ---
 (Decrease) increase in short-term
 notes payable, net (78) (346) 20 (398)
 Reduction of long-term debt (416) --- (809) ---
 Dividends on common shares (7) (7) (21) (38)
 Proceeds from issue of common
 shares --- 523 --- 554
 Total (451) 91 (660) 118
 Increase (decrease) in cash
 and short-term deposits 2 73 (1) 26
 Cash and short-term deposits
 (deficiency) at beginning
 of period (15) (11) (12) 36
 Cash and short-term deposits
 (deficiency) at end of period (13) 62 (13) 62
 PETRO-CANADA
 Consolidated Balance Sheet
 (unaudited, millions of dollars)
 September 30, December 31,
 1992 1991
 Assets
 Current assets 1,125 1,330
 Investments 82 453
 Property, plant and equipment, net 3,825 4,084
 Other assets 233 167
 Total 5,265 6,034
 Liabilities and shareholders' equity
 Current liabilities
 Outstanding checks less cash and
 short-term deposits 13 12
 Bank loan 50 ---
 Short-term notes payable 138 118
 Accounts payable and
 accrued liabilities 822 857
 Total 1,023 987
 Long-term debt 1,009 1,531
 Deferred credits 373 459
 Deferred income taxes 481 564
 Shareholders' equity 2,379 2,493
 Total 5,265 6,034
 -0- 10/29/92
 /CONTACT: Bob Foulkes, (media and general inquiries) 403-296-8472, or Paul Cox, (investor and analyst inquiries) 403-296-4000, both of Petro-Canada/
 (PCA.) CO: Petro-Canada ST: Alberta IN: OIL SU: ERN


BP -- LA022 -- 6742 10/29/92 16:09 EST
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