- Shares in Husky Energy (HSE) have taken a blow this morning after the company posted a C$7 billion loss for the third quarter of 2020
- This compares to a net loss of $304 million in the second quarter of 2020 and a profit of $273 million in the third quarter of last year
- The decline in earnings was largely due to an after-tax impairment of more than $6.7 billion, brought on by lower forecast commodity prices, reduced capital investment and delayed future development plans
- However, any further losses were partially offset by increased production from the Liwan Gas Project and lower operating costs due to company-wide cost saving measures
- Husky Energy (HSE) is currently down 6.44 per cent to $3.34 per share at 9:42am EDT
Shares in Husky Energy (HSE) have taken a blow this morning after the company posted a C$7 billion third quarter loss.
The decline in performance comes after a comparatively insignificant loss of $304 million in the second quarter of this year, and a profit of $273 million for the third quarter of 2019.
Husky attributed the decline largely to an after-tax impairment of more than $6.7 billion in its Lloydminster Heavy Oil Value Chain, Oil Sands, Western Canada Production and US Refining segments.
This was in turn brought on by declines in forecasted long-term commodity prices, the company’s decision to reduce capital spending, delayed future development plans, and impacts related to the recently unveiled $3.8 billion strategic combination with Cenovus Energy.
That said, any further increase in losses were partially offset by increased production from the Liwan Gas Project, a decrease in blending costs due to lower condensate prices, and lower general operating costs thanks to company-wide cost saving measures.
Rob Peabody, CEO of Husky Energy, said additional steps will be taken to protect the company’s balance sheet and generate free cash flow.
“We are confident that the combination with Cenovus will deliver significant long-term value by creating a larger, stronger and more resilient Canadian integrated energy producer.
“Over the next few months while the transaction is pending, we will maintain our focus on safe and reliable operations, while planning for a seamless integration to facilitate the accelerated return of capital to shareholders,” he added.
Husky currently has around $5.5 billion in liquidity, consisting of $1 billion in cash and $4.5 billion in available credit facilities.
Husky Energy (HSE) is currently down 6.44 per cent to $3.34 per share at 9:42am EDT.
