Suncor accelerates increased returns to shareholders
- Increases dividend by 100%
- Increases NCIB program to purchase up to 107 million shares
Unless noted otherwise, all financial figures are in Canadian dollars
CALGARY, Alberta, Oct. 27, 2021 (GLOBE NEWSWIRE) -- Given the strength of the company and confidence in the execution of Suncor Energy’s strategic plans, the Board of Directors has approved the acceleration of increased returns to shareholders by the reinstatement of the dividend to 2019 levels. The reinstatement to $0.42 per common share from $0.21 per share is a 100% increase in the quarterly dividend, commencing with the dividend payable on December 24, 2021 to shareholders of record at the close of business on December 3, 2021. The dividend increase is enabled through disciplined capital spending and allocation, as well as progress in generating an incremental $2 billion of free funds flow by 2025.
In addition, the Board has also authorized a further 2% increase in the normal course issuer bid (NCIB) to purchase by February 7, 2022 up to approximately 7% (107 million shares) of Suncor’s public float as at January 31, 2021.
2021 Performance to Date
Operational initiatives and higher commodity prices than expected have accelerated the achievement of two key objectives, namely increasing return of capital to shareholders and reducing net debt. Highlights include:
- Safe and reliable operating performance continues to strengthen, including:
- In Q3, Downstream demand has returned to near 2019 levels and is expected to continue to strengthen, enabling industry leading refinery utilization rates and cash generation going forward;
- Significant progress has been achieved on overburden removal at Fort Hills and the project is on track to ramp to full rates by the end of 2021; and
- Our remaining upstream assets are performing at strong operating levels with all 2021 planned major maintenance successfully completed.
- Substantial progress has been made on the company’s plan to realize $2 billion of incremental annual free funds flow by 2025 as outlined on Investor Day, with approximately $465 million on track to be achieved in 2021 and similar progress expected to continue in 2022. As outlined on Investor Day, this annual free funds flow increase for 2021 is being achieved through increased revenue and margin, and increased productivity on tailings asset retirement spend.
- As at September 30, 2021 net debt has been reduced by $3.1 billion in 2021. With expected free funds flow in the fourth quarter and the receipt of the Golden Eagle asset sales proceeds in October, the net debt balance by year end 2021 is anticipated to be near $15 billion, an approximate $5 billion reduction in 2021, $1 billion lower than the December 31, 2019 net debt level and near the top of 2025 target net debt range set out Investor Day. Net debt reduction will continue to be a focus as we further fortify the balance sheet, accelerating the pace of deleveraging outlined on Investor Day.
- Share buybacks for the year-to-date period ending September 30, 2021 totalled $1.7 billion for approximately 63 million shares, or 4.1% of the outstanding shares at January 31, 2021, significantly higher than assumed in the Investor Day scenario.
- As part of our disciplined capital allocation, we will continue to execute on our Environment, Social and Governance (ESG) strategic initiatives and invest in energy expansion at mid teens returns to achieve our 10 Megatonne (MT) emission reduction target by 2030.