Canadian oil and gas firm, Cenovus Energy (NYSE:CVE) Inc., reported significantly higher financial results in Q3 2023, compared to the previous quarter. The company's safe, reliable operations led to an operating cash of $2.7 billion, adjusted funds flow of $3.4 billion, and free funds flow of $2.4 billion. Upstream production reached 797,000 BOE/d and downstream throughput averaged 664,000 bbls/d due to strong asset performance and an integrated business approach.
On Thursday, the company's shares surged by 1.6% to C$26.77 as a result of these increased profits. Following extensive rebuilds, two major U.S. plants managed to increase refinery throughput by 25%, achieving 664,000 barrels/day. The quarterly net income rose from C$1.61 billion (81 Canadian cents/share) to C$1.86 billion (97 Canadian cents/share) YoY.
CEO Jon McKenzie attributed the positive results to operational efficiency and favorable commodity prices. Shareholders reaped benefits from a $1.2 billion return through common share warrants obligation ($600 million), share buybacks ($361 million), and dividends ($264 million).
The company also announced a significant increase in U.S. Manufacturing crude oil throughput by 26% to 555,900 bbls/d from Q2 and a reduction in long-term debt by US$1.0 billion to $7.2 billion by the end of the quarter, which lowered net debt to $6.0 billion.
LSEG data shows that 16 of 18 brokerages rate the stock as "buy" or higher, with a median PT of C$33. Considering the session's gains on Thursday, the stock has risen by 2% YTD at an exchange rate of $1 = 1.38 Canadian dollars.
Lastly, the Toronto Stock Exchange (TSX) approved a renewal of Cenovus Energy's normal course issuer bid (NCIB) for another year, indicating the company's strong position and potential for future growth.
InvestingPro Insights
InvestingPro's real-time data and tips provide valuable insights into Cenovus Energy Inc .'s financial health and performance. The company boasts a high earnings quality with free cash flow exceeding net income, a key indicator of financial robustness. Moreover, Cenovus has consistently maintained dividend payments for 15 consecutive years, a testament to its commitment to rewarding shareholders.
From a data perspective, the company's adjusted market cap stands at $36.66 billion, with a P/E ratio of 13.28, indicating a fair valuation (InvestingPro Data). Its dividend yield as of Q3 2023 is 2.12%, showcasing the company's steady income generation capability (InvestingPro Data). Lastly, the company's price has seen a significant uptick over the last six months (InvestingPro Tip 10), reflecting its strong market performance.
For more comprehensive insights and additional tips, the InvestingPro platform offers a wealth of information to help investors make informed decisions. Currently, there are 11 additional tips for Cenovus Energy Inc. listed on InvestingPro.
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