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Husky Energy shares fall on cash flow miss

Husky Energy shares fall

Shares in Husky Energy Inc. fell by as much as 11.7 per cent on Thursday morning in Toronto after it reported fourth-quarter results that matched analyst expectations on production but missed by a wide margin on funds from operations.

The Calgary-based company blamed lower U.S. refinery margins, an extended shutdown at its refinery in Lima, Ohio, and $74 million related to employee severance for posting funds from operations of $469 million, compared to $583 million in the year-earlier period and analyst expectations of $712 million, according to the financial markets data firm Refinitiv.

The company posted a net loss of $2.34 billion in the last three months of 2019 as it took asset impairment and other charges related to its long-term price assumptions and reductions in its long-term capital spending plans.

The loss amounted to $2.34 per share for the quarter ended Dec. 31 compared with a profit of $216 million or 21 cents per share in the same quarter a year earlier.

Revenue, net of royalties, totalled $4.79 billion compared with $4.99 billion in the fourth quarter of 2018.

Husky says non-cash asset impairments and other charges totalled $2.3 billion after tax in its most recent quarter primarily related to its upstream assets in North America, including its Sunrise project.

Other charges also included exploration-related write downs and asset de-recognition at its Lima Refinery following the completion of a crude oil flexibility project.

The writedowns echo a $3.3-billion charge taken by oilsands rival Suncor Energy Inc. earlier this month, with $2.8 billion of that related to lower forecast prices for heavy oil from its Fort Hills oilsands mine in northern Alberta. Partner Teck Resources Ltd. took a charge of $910 million for the same reason for its 21.3 per cent stake in the Fort Hills mine.



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