SU » Topics » Energy Marketing & Refining (EM&R) - Canada

This excerpt taken from the SU 6-K filed Oct 28, 2005.

Energy Marketing & Refining (EM&R) — Canada

 

EM&R’s Rack Back and Rack Forward organizational structures have been consolidated into one unit for the purposes of external segmented reporting. Prior year amounts have been reclassified to conform to this presentation. EM&R’s external results continue to be measured and analyzed on a margin basis.

 

EM&R recorded third quarter 2005 net earnings of $17 million, compared to net earnings of $29 million in the third quarter of 2004. The decrease in net earnings was primarily due to lower refining volumes, lower refinery utilization and higher energy costs. Third quarter 2005 utilization was 96%, compared to 104% in the third quarter of 2004. The decrease was due to a fire which occurred at the Sarnia refinery in July of this year. The damaged components were back in full operation in August. EM&R’s results continued to be negatively impacted by high prices for synthetic crude oil in 2005.

 

Refining margins on Suncor’s proprietary refined products were 9.2 cents per litre (cpl) in the third quarter of 2005, compared to 8.8 cpl in the third quarter of 2004. Retail margins were 5.4 cpl in the third quarter of 2005 compared to 3.7 cpl in the third quarter of 2004 reflecting strengthened market conditions towards the end of the third quarter of 2005.

 

Energy marketing and trading activities, including physical trading activities, resulted in net earnings of $2 million in the third quarter of 2005, unchanged from the third quarter of 2004.

 

 

 

 

 

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Cash flow from operations was $44 million in the third quarter of 2005, compared to $52 million in the third quarter of 2004. The decrease was primarily due to the same factors that affected net earnings.

 

EM&R recorded net earnings of $19 million for the first nine months of 2005 compared to $56 million during the first nine months of 2004. The decrease reflects lower refining margins, higher energy costs, and lower mark-to-market gains on inventory related derivatives, during the first nine months of 2005.

 

Cash flow from operations for the first nine months of 2005 was $92 million, compared to $131 million in the first nine months of 2004. The decrease was primarily due to the same factors that affected net earnings.

 

Suncor’s diesel desulphurization and Oil Sands integration project at the Sarnia refinery is on budget and on schedule for completion in 2006.

 

See page 12 for an update on our significant projects in progress.

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