Imperial Oil(IMO) - 2025 Q2 - Quarterly Results

Q2 2025 Financial and Operating Results Imperial announces its second quarter 2025 financial and operating results, highlighting key performance metrics and strategic advancements Financial and Operating Highlights Imperial reported a net income of $949 million in Q2 2025, a decrease from Q2 2024, despite achieving record upstream production and advancing strategic projects Q2 2025 Key Financial Metrics | Metric | Q2 2025 (million CAD) | Q2 2024 (million CAD) | Change (million CAD) | Six Months 2025 (million CAD) | Six Months 2024 (million CAD) | Change (million CAD) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Income | $949 | $1,133 | ($184) | $2,237 | $2,328 | ($91) | | Diluted EPS (CAD) | $1.86 | $2.11 | ($0.25) | $4.38 | $4.34 | +$0.04 | | Cash Flow from Operations | $1,465 | $1,629 | ($164) | $2,992 | $2,705 | +$287 | | Capital & Exploration Expenditures | $473 | $462 | +$11 | $871 | $958 | ($87) | - Upstream production reached 427,000 gross oil-equivalent barrels per day, marking the highest second-quarter output in over 30 years[3][6] - Kearl achieved its highest-ever second-quarter total gross production, averaging 275,000 barrels per day (195,000 barrels Imperial's share)[3][6][12] - The company completed construction and commissioning of Canada's largest renewable diesel facility at the Strathcona refinery, with first production in July[6][7][12] Shareholder Returns and Business Environment Imperial renewed its share repurchase program and returned $367 million to shareholders amidst lower crude prices but improved refining margins - The company renewed its share repurchase program (NCIB) to buy back up to 5% of outstanding common shares and plans to accelerate purchases to complete the program before the end of the year[6][8][12] - Returned $367 million to shareholders in Q2 2025 through dividend payments and declared a Q3 dividend of $0.72 per share[7][12] - The Q2 2025 business environment saw decreased crude oil prices from Q1, a narrower Canadian WTI/WCS spread, and improved refining margins due to strong seasonal demand[13] Segment Performance Analysis (Q2 2025 vs Q2 2024) Upstream net income declined due to lower prices, Downstream improved from better margins, and Chemicals significantly dropped from weaker polyethylene margins Net Income by Segment (Q2, million CAD) | Segment | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Upstream | $664 | $799 | ($135) | | Downstream | $322 | $294 | +$28 | | Chemical | $21 | $65 | ($44) | | Corporate and other | ($58) | ($25) | ($33) | | Total Net Income | $949 | $1,133 | ($184) | Upstream Upstream net income decreased to $664 million due to lower commodity prices, partially offset by higher production volumes from Kearl and Syncrude Average Realizations (CAD per barrel) | Product | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Bitumen | $65.82 | $83.02 | | Synthetic crude oil | $87.85 | $111.56 | Gross Production (thousand barrels per day) | Asset | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Kearl (Imperial's share) | 195 | 181 | | Cold Lake | 145 | 147 | | Syncrude | 77 | 66 | - Higher production at Kearl was driven by mine productivity and improved reliability, while higher Syncrude production was due to the timing of its annual coker turnaround[21][22] Downstream Downstream net income rose to $322 million, driven by improved margins and increased petroleum product sales, despite slightly lower refinery throughput Downstream Operations | Metric | Q2 2025 (kbbl/d) | Q2 2024 (kbbl/d) | | :--- | :--- | :--- | | Refinery throughput | 376 | 387 | | Refinery capacity utilization (%) | 87% | 89% | | Petroleum product sales | 480 | 470 | - Higher margins were the primary driver of increased net income, reflecting improved market conditions[23] - Increased petroleum product sales were enabled by the Trans Mountain pipeline expansion[25] Chemicals Chemicals net income sharply declined to $21 million, primarily due to significantly lower polyethylene margins - Chemical net income was $21 million in Q2 2025, compared to $65 million in Q2 2024[12][62] - The decline in chemical earnings was primarily driven by lower polyethylene margins[12][26] Liquidity and Capital Resources (Q2 2025) Q2 2025 saw operating cash flow decrease to $1,465 million due to lower earnings, with $371 million used in financing activities, primarily for dividends Cash Flow Summary (Q2, million CAD) | Activity | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating activities | 1,465 | 1,629 | | Investing activities | (472) | (456) | | Financing activities | (371) | (329) | | Increase in cash | 622 | 844 | - Dividends paid in the quarter totaled $367 million, or $0.72 per share, up from $321 million, or $0.60 per share, in Q2 2024[30] - The company did not repurchase any shares during the second quarter of 2025 or 2024[30] Year-to-Date Performance Analysis (Six Months 2025 vs 2024) Year-to-date net income slightly decreased to $2,237 million, with Upstream earnings increasing, while Downstream and Chemicals declined Net Income by Segment (Six Months, million CAD) | Segment | 6M 2025 | 6M 2024 | Change | | :--- | :--- | :--- | :--- | | Upstream | $1,395 | $1,357 | +$38 | | Downstream | $906 | $925 | ($19) | | Chemical | $52 | $122 | ($70) | | Corporate and other | ($116) | ($76) | ($40) | | Total Net Income | $2,237 | $2,328 | ($91) | Upstream Upstream net income increased to $1,395 million year-to-date, driven by higher volumes and favorable foreign exchange, despite lower commodity prices Gross Production (Six Months, thousand barrels per day) | Asset | 6M 2025 | 6M 2024 | | :--- | :--- | :--- | | Kearl (Imperial's share) | 189 | 189 | | Cold Lake | 150 | 144 | | Syncrude | 75 | 70 | - Key drivers for higher year-to-date income were higher volumes, primarily from Grand Rapids solvent-assisted SAGD, and favorable foreign exchange impacts[34][37] Downstream Downstream net income slightly decreased to $906 million year-to-date, as improved margins were offset by unfavorable wholesale volumes and lower throughput Downstream Operations (Six Months) | Metric | 6M 2025 (kbbl/d) | 6M 2024 (kbbl/d) | | :--- | :--- | :--- | | Refinery throughput | 387 | 397 | | Refinery capacity utilization (%) | 89% | 92% | | Petroleum product sales | 468 | 460 | - The earnings decrease was primarily due to unfavorable wholesale volume impacts of about $70 million[39] Chemicals Chemicals net income significantly declined to $52 million year-to-date, primarily due to weaker industry polyethylene margins - Chemical net income was $52 million for the first six months of 2025, down from $122 million in 2024, primarily due to weaker polyethylene margins[41][62] Liquidity and Capital Resources (Six Months 2025) Year-to-date operating cash flow increased to $2,992 million, driven by lower deferred tax and working capital impacts, while financing cash use rose due to higher dividends Cash Flow Summary (Six Months, million CAD) | Activity | 6M 2025 | 6M 2024 | | :--- | :--- | :--- | | Operating activities | 2,992 | 2,705 | | Investing activities | (849) | (937) | | Financing activities | (736) | (612) | | Increase in cash | 1,407 | 1,156 | - Dividends paid in the first six months totaled $674 million, or $1.32 per share, up from $599 million, or $1.10 per share, in the same period of 2024[46] Forward-Looking Statements This section outlines forward-looking statements on future plans and projections, subject to various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements include plans to accelerate the NCIB share repurchase program, commitment to returning surplus cash to shareholders, and expected performance from the Strathcona renewable diesel and Leming SAGD projects[48] - Actual results could differ materially due to factors like changes in supply and demand for oil, regulatory events, competition, operational difficulties, and currency exchange rates[50][51] Financial Statements and Operating Data (Attachments) This section provides detailed unaudited financial and operating data, including consolidated statements, segmented results, operating statistics, and non-GAAP reconciliations Consolidated Financial Statements This section presents the Consolidated Statement of Income and Cash Flows, detailing revenues, expenses, net income, and cash movements from core activities Consolidated Income Statement Summary (Q2, million CAD) | Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total revenues and other income | 11,232 | 13,383 | | Total expenses | 9,988 | 11,894 | | Income before income taxes | 1,244 | 1,489 | | Net income | 949 | 1,133 | Consolidated Cash Flow Summary (Six Months, million CAD) | Item | 6M 2025 | 6M 2024 | | :--- | :--- | :--- | | Cash flows from operating activities | 2,992 | 2,705 | | Cash flows from investing activities | (849) | (937) | | Cash flows from financing activities | (736) | (612) | Segmented Data and Operating Statistics This section provides detailed segmented financial data and operating statistics, including production volumes, price realizations, and refinery metrics - Attachment III provides a comprehensive breakdown of revenues, purchases, production costs, and capital expenditures for each business segment (Upstream, Downstream, Chemical)[62] - Attachment IV details key operating metrics, including gross and net crude oil and natural gas production, refinery throughput and utilization, and sales volumes for various petroleum products[64] Non-GAAP Financial Measures Reconciliation This section explains and reconciles non-GAAP financial measures like 'Free cash flow' and 'Cash operating costs' to their comparable GAAP figures for transparency Free Cash Flow Reconciliation (Q2, million CAD) | Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Cash flows from operating activities | 1,465 | 1,629 | | Additions to property, plant and equipment | (471) | (461) | | Proceeds from asset sales | 2 | 3 | | Other investing activities | (3) | 2 | | Free cash flow | 993 | 1,173 | Cash Operating Costs Reconciliation (Q2, million CAD) | Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total expenses | 9,988 | 11,894 | | Less: Purchases, taxes, D&D, etc. | (8,073) | (9,983) | | Cash operating costs | 1,915 | 1,911 |