• Earnings: $1,288 million, highest ever first-quarter earnings.
• Earnings Per Share: Increased by 13% year over year and 6% sequentially.
• Free Cash Flow: $1,150 million.
• Cash on Hand: Nearly $1,800 million.
• Cash from Operating Activities: $1,760 million, excluding working capital impacts.
• Upstream Production: 418,000 gross oil equivalent barrels per day.
• Refinery Throughput: 397,000 barrels per day, 91% utilization.
• Petroleum Product Sales: 455,000 barrels per day.
• Dividends Paid: $307 million.
• Net Income: $1,288 million, up $93 million from Q1 2024.
• Upstream Earnings: $731 million, down $147 million sequentially.
• Downstream Earnings: $584 million, up $228 million sequentially.
• Chemical Business Earnings: $31 million, up $10 million sequentially.
• Capital Expenditures: $398 million, $100 million lower than Q1 2024.
• Second-Quarter Dividend: $0.72 per share.

• Warning! GuruFocus has detected 5 Warning Signs with APLE.

Release Date: May 02, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Imperial Oil Ltd (IMO) reported its highest ever first-quarter earnings of $1,288 million, marking a 13% year-over-year increase in earnings per share.
• The company generated a strong free cash flow of $1,150 million and ended the quarter with nearly $1,800 million of cash on hand.
• Upstream production was solid at 418,000 gross oil equivalent barrels per day, supported by higher year-over-year production at Cold Lake.
• The downstream business delivered strong margin capture in a recovering crack spread environment, benefiting from structural advantages.
• The renewable diesel project at the Strathcona refinery is on track to start up mid-2025, indicating progress in sustainable initiatives.

Negative Points

• Upstream earnings of $731 million were down $147 million from the fourth quarter due to lower volumes.
• Kearl's production was impacted by extreme weather conditions in February, resulting in lower volumes compared to previous quarters.
• Syncrude production faced unplanned downtime, affecting output and requiring the use of interconnect pipelines to maintain upgrader operations.
• Refinery throughput was lower at 397,000 barrels per day, reflecting additional maintenance activities.
• Chemical business earnings were down $26 million compared to the first quarter of 2024, primarily due to lower margins.

Q & A Highlights

Q: Can you elaborate on the strong downstream performance and margin capture in the first quarter? A: Bradley Corson, CEO, highlighted the structural advantages in Canada, which contributed to the success. Scott Maloney, VP of Downstream, added that leveraging structural advantages allowed them to place barrels in high uplift opportunities across Canada. Volatility in the marketplace and maintenance activities also contributed to the strong margins.

Q: With the renewal of the NCIB, how do you plan to execute it given the current oil price environment? A: Bradley Corson, CEO, stated that despite market uncertainties, Imperial Oil is in a strong cash position and will monitor external factors. Historically, they have accelerated the NCIB to return surplus cash to shareholders timely, and they will continue to assess the appropriate pace for the future.

Q: How should we think about Cold Lake cash costs for the rest of the year and beyond? A: Bradley Corson, CEO, noted that Cold Lake's cash costs are down $3 per barrel compared to a year ago, with a target of $13 per barrel. Continued success at Grand Rapids and the startup of Leming will support this cost reduction strategy.

Q: Have you seen any signs of recessionary demand affecting your refining system? A: Bradley Corson, CEO, mentioned that they have not observed any material degradation in demand. Product inventories are at the lower end of the five-year band, contributing to market strength.

Q: What drives the confidence in running four-year intervals between major maintenance at Kearl? A: Cheryl Gomez-Smith, SVP of Upstream, explained that integrating technology, data analytics, and a continuous improvement mindset have optimized turnaround activities. This approach allows for more efficient maintenance and supports the extension to a four-year interval.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.