CALGARY, Alberta, May 16, 2020 – Shares of Cenovus Energy Inc. (NYSE: CVE) inclined 6.00% to $3.71. The stock grabbed the investor’s attention and traded 4.396M shares as compared to its average daily volume of 10.88M shares. The stock’s institutional ownership stands at 73.10%.
Cenovus Energy Inc. (NYSE: CVE) reported the company generated free funds flow of $622.0M while maintaining its industry-leading low cost structure and meeting mandatory production curtailment levels set by the Government of Alberta. Other third-quarter highlights include:
- Adjusted funds flow of $916.0M; cash from operating activities of $834.0M.
- Net earnings from continuing operations of $187.0M as compared to a net loss a year prior.
Total revenue in the quarter was $4.70B, contrast with $5.90B in the same period in 2018. While Cenovus achieved stronger realized pricing in the third quarter of this year, upstream revenue was influenced by higher royalties and lower volumes. Third-quarter revenue from refining and marketing reduced from the same period a year earlier because of lower refined product pricing.
Cenovus generated third-quarter adjusted funds flow of $916.0M and cash from operating activities of $834.0M. The company achieved higher third-quarter upstream operating netbacks, counting realized risk management, contrast to the year prior. Lower finance and general and administrative costs had a positive impact on adjusted funds flow. Results were negatively influenced by slightly lower oil production volumes as a result of curtailment and lower realized margins from refining because of narrower market crack spreads and higher crude input costs. Cenovus had free funds flow of $622.0M in the third quarter, 12% lower than a year earlier, driven by lower adjusted funds flow.
Operating earnings from continuing operations were $284.0M in the third quarter, contrast with an operating loss from continuing operations of $41.0M in the same period of 2018, which included a noteworthy provision for onerous contracts related to real estate. Net earnings from continuing operations were $187.0M contrast with a net loss from continuing operations of $242.0M a year earlier. The swing from a net loss to net earnings was mostly driven by higher operating earnings in the third quarter of 2019 and a before-tax loss of $795.0M ($526.0M after-tax) recorded in the third quarter of 2018 on the divestiture of the Cenovus Pipestone Partnership. Net earnings included a deferred income tax expense of $46.0M contrast with a deferred tax recovery of $255.0M in 2018, non-operating foreign exchange losses of $87.0M contrast with gains of $172.0M and unrealized risk management losses of $9.0M contrast with unrealized gains of $247.0M in the year-earlier quarter.
Balance sheet strength and capital discipline:
Cenovus’s net debt at the end of September was $6.80B, contrast with $7.10B at the end of the second quarter of 2019. The company’s net debt to adjusted EBITDA ratio was 1.9 times at the end of September, down from 2.4 times at the end of the second quarter. In October 2019, Cenovus used cash on hand and short-term borrowings to repay US$500.0M in outstanding unsecured notes at maturity and repurchase US$13.0M of additional notes. Deleveraging remains a top priority for Cenovus as the company continues to pursue its net debt target of $5.0B.
CVE has a market value of $4.47B while its EPS was booked as $0.17 in the last 12 months. The stock has 1.20B shares outstanding. In the profitability analysis, the company has gross profit margin of 54.50% while net profit margin was 1.50%. Beta value of the company was 2.62; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 2.50.