Suncor Energy Inc. press release
Suncor Energy Reports Fourth Quarter 2024 Results
TSX - Toronto Stock Exchange · Canada
Unless otherwise noted, all financial figures are unaudited, presented in Canadian dollars (Cdn$), and derived from the company's condensed consolidated financial statements which are based on Canadian generally accepted accounting principles (GAAP), specifically International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and are prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting. Production volumes are presented on a working-interest basis, before royalties, except for production values from the company's Libya operations, which are presented on an economic basis. Certain financial measures referred to in this news release (adjusted funds from operations, adjusted operating earnings, free funds flow and net debt) are not prescribed by Canadian generally accepted accounting principles (GAAP). See the Non-GAAP Financial Measures section of this news release. References to Oil Sands operations exclude Suncor Energy Inc.'s interest in Fort Hills and Syncrude.
Calgary, Alberta--(Newsfile Corp. - February 5, 2025) - Suncor Energy Inc. (TSX: SU) (NYSE: SU)
Fourth Quarter Highlights
Generated $3.5 billion in adjusted funds from operations and $1.9 billion in free funds flow. Returned $1.7 billion to shareholders, with $1 billion in share repurchases and $700 million in dividends. Record upstream production of 875,000 barrels per day (bbls/d) with upgrader utilization of 103%. Near record refining throughput of 486,200 bbls/d with refinery utilization of 104%. Record refined product sales of 613,300 bbls/d, exceeding the previous record set in the third quarter. Shifted to 100% return of excess funds to shareholders via share repurchases in the fourth quarter.
"Suncor's fourth quarter was about finishing an exceptional year strong and building momentum for 2025," said Rich Kruger, Suncor's President and Chief Executive Officer. "Performance records were set across the company in both the quarter and for the full year, including records in upstream production, refining throughput, refined product sales and asset utilization. In addition, personnel safety and operational integrity were at or near best-ever annual performance levels. Suncor's people, company-wide, delivered by working in a team-based, results-oriented manner. Looking ahead in 2025, we remain committed to continuing to deliver high performance results with safe, reliable and cost-effective operations to achieve our free cash flow targets and create superior shareholder value."
Annual 2024 Highlights
Increased normalized free funds flow by $2.3 billion, relative to 2023. Generated $13.8 billion in adjusted funds from operations and $7.4 billion in free funds flow. Returned $5.7 billion to shareholders, with $2.9 billion in share repurchases and $2.8 billion in dividends. Record upstream production of 827,600 bbls/d with record upgrader utilization of 98%. Record refining throughput of 465,000 bbls/d with refinery utilization of 100%. Record refined product sales of 600,400 bbls/d, with all four quarters in 2024 the highest-ever. Total operating, selling and general expenses down more than $300 million versus 2023 despite significantly higher volumes.
Fourth Quarter Results
| Financial Highlights | Q4 | Q3 | Q4 | | ($ millions, unless otherwise noted) | 2024 | 2024 | 2023 | | Net earnings | 818 | 2 020 | 2 820 | | Per common share(1)(dollars) | 0.65 | 1.59 | 2.18 | | Adjusted operating earnings(2) | 1 566 | 1 875 | 1 635 | | Per common share(1)(2)(dollars) | 1.25 | 1.48 | 1.26 | | Adjusted funds from operations(2) | 3 493 | 3 787 | 4 034 | | Per common share(1)(2)(dollars) | 2.78 | 2.98 | 3.12 | | Cash flow provided by operating activities | 5 083 | 4 261 | 4 318 | | Per common share(1)(dollars) | 4.05 | 3.36 | 3.34 | | Capital and exploration expenditures | 1 498 | 1 467 | 1 482 | | Free funds flow(2) | 1 923 | 2 232 | 2 482 | | Dividend per common share(1)(dollars) | 0.57 | 0.55 | 0.55 | | Share repurchases per common share(3)(dollars) | 0.80 | 0.62 | 0.29 | | Returns to shareholders(4) | 1 713 | 1 480 | 1 079 | | Net debt(2)(5) | 6 861 | 7 968 | 9 852 | | | | | | | | Q4 | Q3 | Q4 | | Operating Highlights | 2024 | 2024 | 2023 | | Total upstream production (mbbls/d) | 875.0 | 828.6 | 808.1 | | Refinery utilization (%) | 104 | 105 | 98 |
(1) Presented on a basic per share basis. (2) Non-GAAP financial measures or contains non-GAAP financial measures. See the Non-GAAP Financial Measures section of this news release. (3) Calculated as the total cost of share repurchases divided by the weighted average number of shares outstanding for the applicable period. (4) Includes dividends paid on common shares and repurchases of common shares. (5) Beginning in the second quarter of 2024, the company revised the definition of net debt to exclude lease liabilities to better align with how management and industry monitor capital structure. Prior period comparatives have been restated to reflect this change.
Financial Results
Adjusted Operating Earnings Reconciliation(1)
| | Q4 | Q3 | Q4 | | ($ millions) | 2024 | 2024 | 2023 | | Net earnings | 818 | 2 020 | 2 820 | | Unrealized foreign exchange loss (gain) on U.S. dollar denominated debt | 514 | (123) | (199) | | Unrealized gain on risk management activities | (16) | (28) | (9) | | Loss on early repayment of long-term debt(2) | 144 | - | - | | Asset impairment and derecognition(3) | 212 | - | 158 | | Gain on significant acquisition | - | - | (1 125) | | Income tax (recovery) expense on adjusted operating earnings adjustments | (106) | 6 | (10) | | Adjusted operating earnings(1) | 1 566 | 1 875 | 1 635 |
(1) Non-GAAP financial measure. All reconciling items are presented on a before-tax basis and adjusted for income taxes in the income tax (recovery) expense on adjusted operating earnings adjustments line. See the Non GAAP Financial Measures section of this news release. (2) During the fourth quarter of 2024, the company recorded a loss on extinguishment of long-term debt of $144 million in the Corporate and Eliminations segment as a result of the early repayment of certain series of its outstanding notes. (3) During the fourth quarter of 2024, Suncor recorded an impairment of $212 million against an equity investment in the Corporate and Eliminations segment.
Suncor's adjusted operating earnings were $1.566 billion ($1.25 per common share) in the fourth quarter of 2024, compared to $1.635 billion ($1.26 per common share) in the prior year quarter, with the decrease primarily due to lower refined product realizations, increased royalties due to higher heavy crude price realizations, and increased depreciation, depletion and amortization (DD&A) expense, partially offset by higher sales volumes. Net earnings were $818 million ($0.65 per common share) in the fourth quarter of 2024, compared to $2.820 billion ($2.18 per common share) in the prior year quarter. In addition to the factors impacting adjusted operating earnings, net earnings for the fourth quarter of 2024 and the prior year quarter were impacted by the reconciling items shown in the table above. Adjusted funds from operations were $3.493 billion ($2.78 per common share) in the fourth quarter of 2024, compared to $4.034 billion ($3.12 per common share) in the prior year quarter, and were primarily influenced by the same factors impacting adjusted operating earnings, as well as a larger tax benefit relating to the acquisition of TotalEnergies EP Canada Ltd. in the prior year quarter compared to the current quarter. Cash flow provided by operating activities, which includes changes in non-cash working capital, increased to $5.083 billion ($4.05 per common share) in the fourth quarter of 2024, compared to $4.318 billion ($3.34 per common share) in the prior year quarter. Operating, selling and general (OS&G) expenses in the fourth quarter of 2024 were comparable to the prior year quarter, primarily due to decreased operations and maintenance costs and lower commodity costs being offset by the company's increased working interest in Fort Hills and increased share-based compensation.
Operating Results
| | Q4 | Q3 | Q4 | | (mbbls/d, unless otherwise noted) | 2024 | 2024 | 2023 | | Total Oil Sands bitumen production | 951.5 | 909.6 | 866.2 | | SCO and diesel production | 572.5 | 543.2 | 495.6 | | Inter-asset transfers and consumption | (28.9) | (29.4) | (19.9) | | Upgraded production – net SCO and diesel | 543.6 | 513.8 | 475.7 | | Bitumen production | 342.6 | 294.6 | 327.0 | | Inter-asset transfers | (68.7) | (32.4) | (45.3) | | Non-upgraded bitumen production | 273.9 | 262.2 | 281.7 | | Total Oil Sands production | 817.5 | 776.0 | 757.4 | | Exploration and Production | 57.5 | 52.6 | 50.7 | | Total upstream production | 875.0 | 828.6 | 808.1 | | Refinery utilization (%) | 104 | 105 | 98 | | Refinery crude oil processed | 486.2 | 487.6 | 455.9 |
Total Oil Sands bitumen production increased to a record 951,500 bbls/d in the fourth quarter of 2024, compared to 866,200 bbls/d in the prior year quarter, primarily due to record production at Firebag, the company's increased working interest at Fort Hills and strong mining performance. The company's net synthetic crude oil (SCO) production increased to a fourth quarter record of 543,600 bbls/d, compared to 475,700 bbls/d in the prior year quarter as the company leveraged its unparalleled regional integration and high reliability, and included record quarterly upgrader utilization of 105% at Syncrude and fourth quarter record upgrader utilization of 102% at Oil Sands Base, compared to 101% and 83%, respectively, in the prior year quarter. The increase was also due to fewer planned maintenance activities at Oil Sands Base in the current quarter compared to the prior year quarter. Non-upgraded bitumen production decreased to 273,900 bbls/d in the fourth quarter of 2024, compared to 281,700 bbls/d in the prior year quarter, due to higher upgrader availability more than offsetting increased bitumen production. Exploration and Production (E&P) production increased to 57,500 bbls/d in the fourth quarter of 2024, compared to 50,700 bbls/d in the prior year quarter, primarily due to the addition of production from Terra Nova, and increased production at Hibernia, partially offset by the absence of production from White Rose due to the asset life extension project. Strong operating performance resulted in utilization rates above 100% at all refineries for the second consecutive quarter. Overall utilization was 104% and throughput was 486,200 bbls/d, compared to 98% and 455,900 bbls/d, respectively, in the prior year quarter. Achieved record refined product sales of 613,300 bbls/d in the fourth quarter of 2024, compared to 575,500 bbls/d in the prior year quarter, with the increase primarily due to higher refinery throughput and the benefit of the company's continued investment in its extensive retail and broader sales network.
Corporate and Strategy Updates
Normalized free funds flow growth update. When adjusted for a US$75 WTI Business Environment, 2024 normalized free funds flow was $7.373 billion, $2.3 billion higher than 2023 normalized free funds flow, demonstrating significant progress towards the three-year growth target of $3.3 billion. New cogeneration facility begins operating. The company began operating a cogeneration facility to replace the coke-fired boilers at Oil Sands Base Plant, which provides the steam generation required for extraction and upgrading activities at a lower cost. The cogeneration facility also generates lower-carbon-intensive power for Alberta's power grid. Quarterly dividend increase. Suncor increased its quarterly dividend by approximately 5% to $0.57 per share. Debt reduction of $1.1 billion.Suncor repaid approximately $1.1 billion aggregate principal amount of certain series of the company's outstanding notes, capturing significant economic value and reducing future interest obligations. Increase in shareholder capital allocation.With achievement of its $8 billion net debt target, Suncor has moved to 100% return of excess funds to shareholders via share repurchases.
Corporate Guidance Updates
There have been no changes to the 2025 corporate guidance ranges previously issued on December 12, 2024.
For further details and advisories regarding Suncor's 2025 corporate guidance, see www.suncor.com/guidance.
Normal Course Issuer Bid (NCIB)
| (thousands of common shares) | Commencement Date | Expiry | Maximum Shares for Repurchase | Maximum Shares for Repurchase (%) | Number of Shares Repurchased | | 2022 NCIB | February 8, 2022 | February 7, 2023 | 71 650 | 5 | 26 232 | | Amended 2022 NCIB | May 11, 2022 | February 7, 2023 | 143 500 | 10 | 91 912 | | 2023 NCIB | February 17, 2023 | February 16, 2024 | 132 900 | 10 | 47 107 | | 2024 NCIB | February 26, 2024 | February 25, 2025 | 128 700 | 10 | 56 892 |
Suncor's current NCIB will terminate on February 25, 2025. The company intends to make an application to renew the NCIB program subsequent to the expiration of its current NCIB.
Between February 26, 2024, and February 3, 2025, pursuant to Suncor's NCIB, Suncor repurchased 56,891,592 common shares on the open market, representing the equivalent of 4.4% of its common shares as at February 12, 2024, for $3.021 billion, at a weighted average price of $53.10 per share.
The actual number of common shares that may be purchased under the NCIB and the timing of any such purchases will be determined by Suncor. The company believes that, depending on the trading price of its common shares and other relevant factors, repurchasing its own shares represents an attractive investment opportunity and is in the best interests of the company and its shareholders. The company does not expect the decision to allocate cash to repurchase shares will affect its long-term strategy.
Non-GAAP Financial Measures
Certain financial measures in this news release – namely adjusted funds from operations, adjusted operating earnings, free funds flow and net debt, and related per share or per barrel amounts – are not prescribed by GAAP. These non-GAAP financial measures are included because management uses the information to analyze business performance, leverage and liquidity, as applicable, and it may be useful to investors on the same basis. These non-GAAP financial measures do not have any standardized meaning and, therefore, are unlikely to be comparable to similar measures presented by other companies. Therefore, these non-GAAP financial measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Except as otherwise indicated, these non-GAAP financial measures are calculated and disclosed on a consistent basis from period to period. Specific adjusting items may only be relevant in certain periods.
Adjusted Operating Earnings
Adjusted operating earnings is a non-GAAP financial measure that adjusts net earnings for significant items that are not indicative of operating performance. Management uses adjusted operating earnings to evaluate operating performance because management believes it provides better comparability between periods. Adjusted operating earnings are reconciled to net earnings in the news release above.
Adjusted Funds From (Used In) Operations
Adjusted funds from (used in) operations is a non-GAAP financial measure that adjusts a GAAP measure – cash flow provided by operating activities – for changes in non-cash working capital, which management uses to analyze operating performance and liquidity. Changes to non-cash working capital can be impacted by, among other factors, commodity price volatility, the timing of offshore feedstock purchases and payments for commodity and income taxes, the timing of cash flows related to accounts receivable and accounts payable, and changes in inventory, which management believe reduces comparability between periods.
| Three months ended December 31 | Oil Sands | Exploration and Production | Refining and Marketing | Corporate and Eliminations | Income Taxes | Total | | | | | | | | ($ millions) | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | | Earnings (loss) before income taxes | 1 625 | 2 660 | 125 | 133 | 410 | 598 | (1 070) | (1) | - | - | 1 090 | 3 390 | | Adjustments for: | | | | | | | | | | | | | | Depreciation, depletion, amortization and impairment | 1 390 | 1 214 | 162 | 99 | 269 | 256 | 30 | 29 | - | - | 1 851 | 1 598 | | Accretion | 128 | 116 | 17 | 15 | 3 | 2 | - | - | - | - | 148 | 133 | | Unrealized foreign exchange loss (gain) on U.S. dollar denominated debt | - | - | - | - | - | - | 514 | (199) | - | - | 514 | (199) | | Change in fair value of financial instruments and trading inventory | 1 | (65) | (7) | (1) | (53) | (30) | - | - | - | - | (59) | (96) | | Bargain purchase gain and revaluations | - | (1 125) | - | - | - | - | - | - | - | - | - | (1 125) | | (Gain) loss on disposal of assets | (6) | - | - | 8 | (5) | (2) | (1) | (3) | - | - | (12) | 3 | | Loss on extinguishment of long-term debt | - | - | - | - | - | - | 144 | - | - | - | 144 | - | | Share-based compensation | 55 | 30 | 4 | 4 | 26 | 10 | 69 | 24 | - | - | 154 | 68 | | Settlement of decommissioning and restoration liabilities | (95) | (70) | (24) | (24) | (20) | (16) | - | - | - | - | (139) | (110) | | Other | 28 | (109) | (3) | (6) | 8 | (7) | 183 | 160 | - | - | 216 | 38 | | Current income tax (expense) recovery | - | - | - | - | - | - | - | - | (414) | 334 | (414) | 334 | | Adjusted funds from (used in) operations | 3 126 | 2 651 | 274 | 228 | 638 | 811 | (131) | 10 | (414) | 334 | 3 493 | 4 034 | | Change in non-cash working capital | | | | | | | | | | | 1 590 | 284 | | Cash flow provided by operating activities | | | | | | | | | | | 5 083 | 4 318 |
| Twelve months ended December 31 | Oil Sands | Exploration and Production | Refining and Marketing | Corporate and Eliminations | Income Taxes | Total | | | | | | | | ($ millions) | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | | Earnings (loss) before income taxes | 6 607 | 6 811 | 867 | 1 691 | 2 596 | 3 383 | (1 883) | (1 296) | - | - | 8 187 | 10 589 | | Adjustments for: | | | | | | | | | | | | | | Depreciation, depletion, amortization and impairment | 5 134 | 4 902 | 707 | 483 | 996 | 934 | 117 | 116 | - | - | 6 954 | 6 435 | | Accretion | 514 | 460 | 67 | 64 | 11 | 8 | - | - | - | - | 592 | 532 | | Unrealized foreign exchange loss (gain) on U.S. dollar denominated debt | - | - | - | - | - | - | 714 | (184) | - | - | 714 | (184) | | Change in fair value of financial instruments and trading inventory | (117) | 27 | 3 | (3) | (8) | (29) | - | - | - | - | (122) | (5) | | Bargain purchase gain and revaluations | - | (1 125) | - | - | - | - | - | - | - | - | - | (1 125) | | Gain on disposal of assets | (15) | (39) | - | (600) | (8) | (28) | (2) | (325) | - | - | (25) | (992) | | Loss on extinguishment of long-term debt | - | - | - | - | - | - | 170 | - | - | - | 170 | - | | Share-based compensation | (47) | 71 | 12 | 12 | (20) | 25 | (2) | - | - | - | (57) | 108 | | Settlement of decommissioning and restoration liabilities | (385) | (326) | (47) | (29) | (56) | (35) | - | - | - | - | (488) | (390) | | Other | 151 | (56) | 1 | (6) | 27 | 10 | 207 | 143 | - | - | 386 | 91 | | Current income tax expense | - | - | - | - | - | - | - | - | (2 465) | (1 734) | (2 465) | (1 734) | | Adjusted funds from (used in) operations | 11 842 | 10 725 | 1 610 | 1 612 | 3 538 | 4 268 | (679) | (1 546) | (2 465) | (1 734) | 13 846 | 13 325 | | Change in non-cash working capital | | | | | | | | | | | 2 114 | (981) | | Cash flow provided by operating activities | | | | | | | | | | | 15 960 | 12 344 |
Free Funds Flow
Free funds flow is a non-GAAP financial measure that is calculated by taking adjusted funds from operations and subtracting capital expenditures, including capitalized interest. Free funds flow reflects cash available for increasing distributions to shareholders and reducing debt. Management uses free funds flow to measure the capacity of the company to increase returns to shareholders and to grow Suncor's business.