Husky Energy Inc. slashed its dividend as it reported a $1.7-billion loss in its first quarter due to impairment charges related to the plunge in crude oil prices as a result of the COVID-19 pandemic.
The company says it will now pay a quarterly dividend of 1.25 cents per share, down from 12.5 cents per share.
Husky says its loss for the first quarter amounted to $1.71 per share for the quarter ended March 31 compared with a profit of $328 million or 32 cents per share in the same quarter a year earlier.
The loss included $1.1 billion in non-cash asset impairment charges primarily related to the company’s upstream assets in North America due to lower crude oil price assumptions.
Funds from operations for the quarter totalled $25 million or two cents per share, down from $959 million or 95 cents per share in the first three months of 2019.
Husky chief executive Rob Peabody says the company was hit by severe pricing headwinds, amplified by geopolitical events, COVID-19 and the associated collapse of global oil and refined product demand.
“We have acted quickly to cut our planned capital spending by half, safely shut in production and reduce refinery throughput to avoid cash-negative margins, with a view that global oil and refined product prices could remain under pressure for a while,” Peabody said.
“These capital reductions and additional cost efficiencies are providing further resilience as we manage the business through this unprecedented market cycle.”
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