Suncor Energy’s second-quarter 2020 operating loss was $1.489 billion compared to operating earnings of $1.253 billion (Can.) in the prior year quarter. Impacts include the realization of $397 million (Can.) in after-tax hydrocarbon inventory losses, recognized in net earnings in first-quarter 2020, and included a first-in, first-out inventory valuation loss of $146 million (Can.) after-tax on the decline in value of refinery feedstock.
The company had a net loss of $614 million (Can.) in second-quarter 2020, compared to net earnings of $2.729 billion (Can.) in the prior year quarter. The net loss included a $478 million (Can.) unrealized after-tax foreign exchange gain on the revaluation of US dollar denominated debt.
The company’s results in the second quarter of 2020 were significantly impacted by the COVID-19 pandemic, which has lowered demand for both crude oil and refined products and, combined with the OPEC+ increase in supply, resulted in a significant decline in commodity prices, compared to the prior year quarter.
Funds from operations were $488 million (Can.) in the quarter, compared to $3.005 billion (Can.) in the prior year quarter.
Cash flow used in operating activities, which includes changes in non-cash working capital, was $768 million (Can.) in second-quarter 2020, reflecting a decrease in accounts payable balances associated with lower operating costs and an increase in income taxes receivable balances due to tax losses incurred. Cash flow provided by operating activities in second-quarter 2019 was $3.433 billion (Can.)
The company remains on track to achieve its $1 billion operating cost reduction target and $1.9 billion capital cost reduction target by yearend.
Refinery utilization averaged 76% in the second quarter of 2020. Refinery utilization rates of greater than 85% were realized exiting the quarter.
Total upstream production decreased to 655,500 boe/d during the of 2020, down from 803,900 boe/d in the prior year quarter as the company managed production to keep pace with reduced downstream demand, including temporarily transitioning to a one-train operation at Fort Hills, and as the company optimized oil sands maintenance activities in response to a weaker business environment.