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PETRO-CANADA CONFIRMS PERFORMANCE IMPROVEMENT WITH RELEASE OF 1992 AUDITED FINANCIAL RESULTS AND OPERATING INFORMATION

 CALGARY, Alberta, Feb. 18 /PRNewswire/ -- Petro-Canada (Toronto, Montreal, Vancouver, Alberta: PCA) released today its audited financial results and selected operating information for 1992.
 As previously announced, consolidated earnings from operations in 1992 were $109 million ($0.50 per share), representing a significant turnaround from a loss of $143 million ($0.74 per share) in 1991. After previously announced unusual items, net earnings in 1992 were $9 million ($0.04 per share), compared to a loss of $598 million ($3.08 per share) in the previous year.
 Cash flow from operations was up $225 million, or 77 percent, from 1991 and totaled $517 million ($2.38 per share). Cost reduction was the key factor in this cash flow improvement. Operating and overhead costs were cut by more than $300 million and interest expense was reduced by $83 million, primarily because of a reduction in debt of $695 million.
 In the fourth quarter of 1992, net earnings were $27 million, compared to a loss of $364 million a year earlier, while cash flow was up more than 80 percent to $156 million.
 Petro-Canada President and Chief Executive Officer Jim Stanford said, "In 1992 we made excellent progress in driving down costs in all areas of our business and substantially reducing debt. We will continue to pursue cost management strategies to improve returns to our shareholders, regardless of the general economic climate."
 Effective Jan. 1, 1992, the company 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 effect of this change was to increase 1992 net earnings by $13 million and cash flow from operations by $23 million.
 Resources division earnings from operations were $149 million in 1992, an increase of $118 million from the $31 million earned in 1991. The 1992 results include gains from asset sales of $24 million and a $21 million income tax adjustment, while asset sales had no impact in 1991. Cash flow from operations was $366 million in 1992, up $63 million, or 21 percent, from 1991.
 Significantly reduced operating and overhead costs were partially offset by lower crude oil volumes and weaker natural gas prices. Ongoing operating and overhead costs were cut by $92 million, or 19 percent. About half of the savings came from gains in efficiency, while the other half was because of lower interests in the Syncrude and Wolf Lake oil sands projects and other producing properties. Overhead cost reductions achieved in the second half of the year amounted to 26 percent on an annualized basis.
 Conventional crude oil production averaged 42,900 barrels a day, a decrease of 5,600 barrels a day from 1991 which was virtually all because of asset rationalization. Daily synthetic crude oil and bitumen production fell 7,500 barrels to average 24,300 barrels, reflecting the sale of interests in the Syncrude and Wolf Lake projects. Natural gas production was essentially unchanged at 517 million cubic feet a day, despite the sale of non-core producing properties in 1992. Ethane and other natural gas liquids production from straddle plants increased by 7 percent.
 Stanford said, "In 1993 and beyond, we plan to balance sales of non-core assets with purchases of interests in core properties. We also expect to increase conventional crude oil production by 5,000 to 6,000 barrels a day in 1993 by further exploiting our existing asset base through infill and horizontal drilling and through enhanced recovery."
 Products division earnings from operations were $30 million in 1992, an increase of $139 million from a loss from operations of $109 million in 1991 on a FIFO basis. Cash flow from operations totaled $200 million, up from $15 million in 1991. Operating and overhead cost reductions of $182 million and higher gross margins were the main reasons for the strong improvement in earnings from operations and cash flow. Sluggish economic conditions, industry overcapacity and intense competition in 1992 limited the company's ability to improve earnings, despite gains in efficiency.
 Petro-Canada's refined product sales volume grew by 4.1 percent in 1992 to 43 million liters per day, compared to an overall Canadian market improvement of about 1.5 percent. This gain occurred despite the closure of 17 percent of the company's retail marketing outlets.
 The volume of crude oil processed by Petro-Canada's refineries remained unchanged at 42 million liters per day. Refinery utilization remained low, but work is advancing on the company's capacity reduction plans announced in January 1992. Refinery units at Port Moody, British Columbia, will cease operations in April 1993, while fuel product units at Mississauga, Ontario, will be taken out of operation in the second half of 1993. These changes will reduce refining capacity by 12,500 cubic meters per day and enable Petro- Canada's remaining refineries to operate at utilization rates above 90 percent.
 Corporate and other net expenses before unusual items were $70 million compared to $65 million in 1991. While 1992 results benefited from significantly lower interest expenses, 1991 results included a reduced deferral of profit on inter-segment purchases in inventory. The segment's results include a net loss of $4 million for ICG Propane Inc., compared to a profit of $3 million in 1991.
 The board of directors has declared a quarterly dividend of 3.25 cents per share payable on April 1, 1993, to shareholders of record on March 5, 1993.
 PETRO-CANADA
 Share Information
 (stated in dollars)
 Fourth Quarter Full Year
 1992 1991 1992 1991
 Net earnings (loss)
 per share 0.12 (1.83) 0.04 (3.08)
 Earnings (loss) from
 operations per share 0.12 (0.05) 0.50 (0.74)
 Cash flow from operations
 per share 0.71 0.40 2.38 1.50
 Dividends per share(a) 0.0325 0.0325 0.13 0.065
 Share price(a)(b) - High 9 1/2 11 1/4 10 3/4 13 1/8
 - Low 7 7/8 9 7 7/8 9
 - Close at
 Dec. 31 8 1/8 9 1/2 8 1/8 9 1/2
 Average shares outstanding
 (millions) 221.7 215.3 217.1 194.1
 Shares traded(a)(c)
 (millions) 6.6 6.9 27.0 23.4
 (a) Subsequent to the Initial Public Offering on July 3, 1991.
 (b) Share prices are for trading on the Toronto Stock Exchange.
 (c) Total shares traded on the Toronto, Montreal, Vancouver and Alberta stock exchanges.
 Selected Financial Data
 (millions of dollars)
 Fourth Quarter Full Year
 1992 1991 1992 1991
 Revenue
 Resources 288 293 1,026 1,069
 Products 1,050 1,015 4,000 4,193
 Corporate and other 95 108 329 382
 Inter-segment sales (183) (190) (637) (683)
 1,250 1,226 4,718 4,961
 Net earnings (loss)
 Resources
 - from operations 33 16 149 31
 - writedown of investment
 in Syncrude --- --- --- (95)
 Total 33 16 149 (64)
 Products
 - from operations 14 (13) 30 (109)
 - restructure and
 reorganization --- (369) --- (379)
 Total 14 (382) 30 (488)
 Corporate and other
 - from operations (20) (17) (70) (65)
 - restructure and
 reorganization --- --- (39) ---
 - (loss) gain on
 retirement of
 long-term debt --- 19 (33) 19
 - loss on disposal of
 investments --- --- (28) ---
 Sub-total (20) 2 (170) (46)
 Total 27 (364) 9 (598)
 Earnings (loss) from
 operations 27 (14) 109 (143)
 Cash flow from operations
 Resources 117 68 366 303
 Products 47 23 200 15
 Corporate and other (8) (5) (49) (26)
 Total 156 86 517 292
 Expenditures on property,
 plant and equipment and
 exploration resources 120 98 331 341
 Products 62 87 109 287
 Corporate and other 7 9 16 24
 Total 189 194 456 652
 Debt 954(a) 1,649
 Debt to debt plus equity
 (percent) 26.5 39.8
 Cash flow return on capital
 employed (percent) 12.4 7.3
 (a) Net of $89 million of cash designated for debt retirement.
 Consolidated Statement of Earnings
 (Millions of dollars)
 Fourth Quarter Full Year
 1992 1991 1992 1991
 Revenue
 Operating 1,209 1,180 4,551 4,806
 Investment and
 other income 41 46 167 155
 1,250 1,226 4,718 4,961
 Expenses
 Crude oil and product
 purchases 642 588 2,358 2,516
 Producing, refining and
 marketing 336 382 1,307 1,554
 General and administrative 62 70 241 300
 Exploration 21 34 56 113
 Depreciation, depletion
 and amortization 99 104 391 407
 Taxes other than
 income taxes 18 17 67 67
 Interest on long-term debt 21 35 117 134
 Other interest 4 10 3 69
 Total 1,203 1,240 4,540 5,160
 Unusual items
 Restructure and
 reorganization --- (637) (60) (655)
 (Loss) gain on retirement
 of long-term debt --- 23 (53) 23
 Writedown of investment
 in Syncrude --- --- --- (138)
 Total --- (614) (121) (770)
 Earnings (loss) before
 income taxes 47 (628) 57 (969)
 Provision for (recovery of)
 income taxes 20 (264) 48 (371)
 Net earnings (loss) 27 (364) 9 (598)
 Consolidated Statement of
 Retained Earnings
 (millions of dollars)
 Fourth Quarter Full Year
 1992 1991 1992 1991
 Retained earnings (deficit) at
 beginning of period, as
 previously reported (748) (263) (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 (748) (263) (709) 9
 Net earnings (loss) 27 (364) 9 (598)
 Dividends on common shares (7) (7) (28) (45)
 Retained earnings (deficit)
 at end of period (728) (634) (728) (634)
 (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 periods 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.
 Consolidated Statement of
 Changes in Financial Position
 (millions of dollars)
 Fourth Quarter Full Year
 1992 1991 1992 1991
 Operating activities
 Net earnings (loss) 27 (364) 9 (598)
 Items not affecting
 cash flow from operations 108 416 452 777
 Exploration expenses 21 34 56 113
 Cash flow from operations 156 86 517 292
 Decrease in advances on
 future natural gas
 deliveries (6) (9) (15) (18)
 Decrease in operating
 working capital 44 118 54 108
 Total 194 195 556 382
 Investing activities
 Expenditures on property,
 plant and equipment and
 exploration (189) (194) (456) (652)
 Proceeds from sale of
 property, plant and
 equipment 28 185 256 311
 Proceeds from sale of
 investments --- 13 348 21
 Other (increase) decrease
 in investments, net --- (9) (2) 49
 Increase in deferred
 charges and other assets,
 net (2) (16) (12) (29)
 Total (163) (21) 134 (300)
 Financing activities and
 dividends
 Proceeds from issue of
 common shares 244 --- 244 554
 Proceeds from issue of
 long-term debt --- 674 100 674
 Decrease in bank loan (50) --- --- ---
 Decrease in short-term
 notes payable, net (52) (189) (32) (587)
 Dividends on common shares (7) (7) (28) (45)
 Reduction of long-term
 debt (71) (726) (880) (726)
 Total 64 (248) (596) (130)
 Increase (decrease) in
 cash and short-term
 deposits 95 (74) 94 (48)
 Cash and short-term
 deposits (deficiency) at
 beginning of period (13) 62 (12) 36
 Cash and short-term
 deposits (deficiency) at
 end of period 82 (12) 82 (12)
 Consolidated Balance Sheet
 (millions of dollars)
 Dec. 31, Dec. 31,
 1992 1991
 Assets
 Current assets
 Cash and short-term
 deposits 82 ---
 Other current assets 1,074 1,330
 Total 1,156 1,330
 Investments 80 453
 Property, plant and
 equipment, net 3,865 4,084
 Deferred charges and
 other assets 249 167
 Total 5,350 6,034
 Liabilities and shareholders'
 equity
 Current liabilities
 Short-term notes payable 86 118
 Accounts payable and
 accrued liabilities 933 857
 Current portion of
 long-term debt 89 ---
 Outstanding checks
 less cash and short-term
 deposits --- 12
 Total 1,108 987
 Long-term debt 868 1,531
 Deferred credits 264 459
 Deferred income taxes 467 564
 Shareholders' equity 2,643 2,493
 Total 5,350 6,034
 Selected Operating Data
 Fourth Quarter Full Year
 1992 1991 1992 1991
 Crude oil and field
 natural gas liquids
 production, net before
 royalties
 (thousands of barrels
 per day)
 Conventional crude oil 42.1 45.2 42.9 48.5
 Synthetic and bitumen 24.3 35.3 24.3 31.8
 Field natural gas
 liquids 12.4 13.6 12.6 12.2
 Total 78.8 94.1 79.8 92.5
 Ethane and natural gas
 liquids production from
 straddle plants
 (thousands of
 barrels per day) 38.1 33.4 36.4 34.0
 Natural gas production,
 net before royalties
 (millions of cubic feet
 per day) 560 563 517 524
 Petroleum product sales
 (thousands of cubic
 meters per day)
 Gasolines 20.1 19.9 20.6 19.9
 Distillates 15.1 13.6 14.4 14.2
 Other including
 petrochemicals 7.8 6.6 8.0 7.2
 Total 43.0 40.1 43.0 41.3
 Crude oil processed by
 Petro-Canada
 (thousands of cubic
 meters per day) 40.4 44.4 41.6 41.4
 Average refinery
 utilization
 (percent) 70 77 72 74
 Propane sales
 (millions of liters) 347 355 1,215 1,234
 -0- 2/18/93
 /CONTACT: Bob Foulkes, public affairs, 403-296-8472 (media); or John Skelton, 403-296-4000 (investors), both of Petro Canada/
 (PCA.)


CO: Petro-Canada ST: Alberta IN: OIL SU: ERN DIV

EH-JB -- LA053 -- 8154 02/18/93 17:47 EST
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