Author: Consultant

Export Development Canada (EDC) has guaranteed fresh commercial loans of up to $3-billion to the controversial Trans Mountain pipeline expansion project that has suffered repeated cost overruns.

The information disclosed by EDC showed that a new loan guarantee of $2.75-$3-billion was signed in July, though it first appeared on EDC’s website late on Friday.

Prime Minister Justin Trudeau’s Liberal government bought the Trans Mountain pipeline in 2018 from Kinder Morgan Inc to ensure the expansion project got built and provided a $10-billion loan guarantee to TMC.

It is meant to unlock Asian markets for Canadian oil, which is mostly exported to the United States now. But the project has been hampered by regulatory obstacles, environmental opposition and construction delays, and is now anticipated to cost $30.9-billion, more than quadrupling the $7.4-billion budgeted in 2017.

The cost blowout and the impact of taxpayer has made the government’s ongoing support a contentious issue. Last year, Finance Minister Chrystia Freeland said that no more public funds would be committed to the project, and TMC has stated that it is looking for external funding.

Critics have also slammed the ownership of a pipeline project by the Liberal government, which they argue runs counter to Trudeau’s ambitious climate goals.

TMC had received an up to $3-billion loan guarantee between late March and early May this year and had received a $10-billion loan guarantee in 2022 from the federal government.

Canada’s finance ministry did not immediately respond to a Reuters request for comment on the fresh loan guarantee. In June, a finance ministry spokesperson said the loan guarantee was “common practice” and did not reflect any new public spending.

The project is expected to start shipping oil in the first quarter of 2024, and will nearly tripling the flow of crude from Alberta’s oil sands to Burnaby, British Columbia, to 890,000 barrels per day.

Thomson Reuters Corp. TRI-T +1.74%increase reported higher second-quarter revenue and is sticking to its key financial targets for the year despite a slowing economy that has started to put modest pressure on the pace of sales to corporate clients.

Revenue at the news and information provider was up 2 per cent year-over-year, to US$1.65-billion, for the quarter ended July 31 – roughly in line with analysts’ estimates. After adjusting for the sale of a majority stake in software company Elite to private equity buyer TPG Inc., revenue was up 5 per cent.

The second quarter was busy for Thomson Reuters, as it pushed forward its adoption of generative artificial intelligence tools, striking a partnership with Microsoft Corp. and acquiring Casetext, a legal startup that built an AI-powered assistant for legal professionals, for US$650-million. Thomson Reuters also sold part of its stake in the London Stock Exchange Group (LSEG) and returned about US$2-billion in proceeds to shareholders.

A tougher economic environment brought about by interest-rate increases to combat inflation has not dented sales and renewals in the company’s largest business lines serving legal, tax and accounting professionals, chief executive officer Steve Hasker said in an interview. Revenue from its legal arm was up 1 per cent to US$705-million, while tax and accounting revenue rose 7 per cent to US$229-million – though, after excluding a drag from divestitures, the units’ revenues were up 6 per cent and 10 per cent respectively.

But sales to some corporate clients, which tend to have more sophisticated procurement departments, and demand for the Reuters Events business both softened a little. Corporate revenue increased 5 per cent to US$392-million.

Because Thomson Reuters gets about 80 per cent of its revenue from multiyear contracts, Mr. Hasker said, “we’re largely but not entirely immune” to the more challenging environment.

“Despite some macroeconomic headwinds, I think we’re pleased with the performance and we view it as a solid quarter,” he added.

Thomson Reuters earned US$894-million, or US$1.90 per share, in the quarter. That compared with a loss of US$115-million, or 24 U.S. cents per share, in the same quarter last year, which was driven by the changing value of the company’s stake in LSEG.

Adjusting to exclude those changing values and the effect of divestitures and other items, the company earned 84 U.S. cents per share in the quarter. That beat analysts’ consensus estimate of 78 U.S. cents per share, according to Refinitiv.

Woodbridge Co. Ltd., the Thomson family holding company and controlling shareholder of Thomson Reuters, also owns The Globe and Mail.

In recent months, Thomson Reuters has been working to show investors that it is on the front foot in adopting generative AI tools that could have a significant effect on legal and financial professions. In addition to acquiring Casetext, which adds 104 employees to Thomson Reuters’s existing AI-focused staff, the company has pledged to spend US$100-million annually on AI capabilities as part of a strategy that will build some of that new technology in-house.

After it acquired Casetext, Scotia Capital analyst Maher Yaghi said the deal “looks like a defensive and an offensive move at the same time,” protecting Thomson Reuters against the disruptive potential of AI tools but also allowing it to improve its own products.

“I view it as more offensive,” Mr. Hasker said. He told analysts on a conference call Wednesday that he has come to understand that companies with proprietary data sets such as Thomson Reuters could have a competitive advantage in making the most of AI models.

Canadian Natural Resources Ltd CNQ-T -2.25%decrease on Thursday posted a second-quarter profit that more than halved, as lower energy prices and drop in oil production squeezed the country’s largest oil and gas producer.

Profits for oil and gas companies have declined from last year’s bumper levels after crude prices eased from multi-year highs when Russia’s invasion of Ukraine upended markets.

Benchmark Brent crude averaged $79.92 a barrel in the second quarter, nearly 28 per cent lower than last year, pressured by the banking crisis and fears of a looming recession.

U.S. natural gas prices plunged nearly 63 per cent during the same period, when demand for the commodity skyrocketed against the backdrop of Russia’s invasion of Ukraine.

Canadian Natural’s production in the quarter ended June 30 stood at 1.19 million barrels of oil equivalent per day (boepd), below last year’s 1.21 million boepd, impacted by wildfires in Western Canada and continued unplanned third-party pipeline outage, the company said.

The company reported a net income of $1.5-billion, or $1.32 per share, for the quarter, down from $3.5-billion, or $3 per share, a year earlier.

Oil prices settled down 2% on Wednesday despite a historic drop in U.S. crude stocks, as traders derisk following the downgrade of the U.S. government’s top credit by a major ratings agency.

U.S. crude stocks fell in the week by 17 million barrels, the largest drop in U.S. crude inventories according to records dating back to 1982, the Energy Information Administration said on Wednesday. The draw was driven by increased refinery runs and strong crude exports

Despite the record stock draw, U.S. oil prices fell amid falls across financial markets after rating agency Fitch downgraded the U.S. government’s top credit rating.

U.S. West Texas Intermediate crude futures settled down $1.88, or 2.3%, to $79.49 a barrel while Brent crude futures settled down $1.71, or 2%, to $83.20 a barrel.

Both contracts rose by more than $1 earlier on the session, buoyed by falling U.S. stockpiles in Tuesday’s data from the American Petroleum Industry, which also indicated a large U.S. stockpile drawdown.

That the U.S. government has pulled an offer to buy 6 million barrels of oil for the Strategic Petroleum Reserve also pushed prices lower, traders and analysts said.

Total product supplied – a proxy for demand – also fell by 1.3 million barrels in the week to 20 million barrels per day, the EIA said.

“Gasoline demand seems to have peaked after higher prices at the pump,” said Edward Moya, senior market analyst of the Americas at OANDA.

Crude oil inventories have also begun to drop in other regions as demand outpaces supply, which has been constrained by deep production cuts from Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC) said.

Concerns have risen that oil buying in China, the world’s biggest oil importer, may slow as prices rise.

Weak PMI data released this week, meanwhile, indicated fuel demand may be weaker than expected.

“Chinese crude buying has been opportunistic rather than due to higher demand. (The) market continues to be driven purely by supply constraints, which are always subject to potential political volatility,” said Sparta Commodities’ Philip Jones-Lux.

Analysts expect Saudi Arabia to extend its voluntary oil output cut of 1 million barrels per day for another month to include September in a meeting of producers on Friday.

OPEC+, which groups OPEC and allies led by Russia, is unlikely to revise its current oil output policy when a panel meets on Friday, six OPEC+ sources told Reuters.

Nutrien Ltd. NTR-T +0.86%increase is indefinitely suspending plans to ramp up its potash production, cutting its capital expenditure and reducing its profit forecast yet again, as a prolonged slump in the global fertilizer market takes its toll on the Canadian giant.

Saskatoon-based Nutrien announced late Wednesday that it is reducing its 2023 adjusted net earnings per share guidance to roughly US$4.72 a share, compared with around US$6.50 a share in May – a figure that had already been revised downward from February.

The fertilizer company had already warned last month that its profit forecast would likely be soon pared back, after it was forced to cut production at one of its mines owing to the inability to export potash out of the port of Vancouver amid the strike by the International Longshore and Warehouse Union.

Nutrien’s exports were curtailed in the second quarter by continuing problems at a terminal in Portland, Ore. That facility was knocked out of potash service after a structural failure with its conveyor system in May.

Formed in 2018 after the merger of Agrium Inc. with PotashCorp of Saskatchewan, Nutrien is one of the world’s largest fertilizer producers, producing potash, nitrogen and phosphate. The company is also a major agricultural retailer in the United States and Canada, selling fertilizers, seeds and pesticides.

Although there were fears over a possible global shortage of potash after sanctions were imposed on major producers Belarus and Russia in 2021 and 2022, the market instead has been weak. That’s in large part because both countries have been able to find alternative routes to subvert the sanctions, and find buyers in markets such as China.

Nutrien chief executive officer Ken Seitzin a statement referenced the “unprecedented volatility” the company has been grappling with in the global crop input market over the past 18 months.

A few months after Russia invaded Ukraine last year, Nutrien announced it was boosting a plan to increase its potash production to 18 million tonnes by 2025, which was a little more than 20-per-cent higher than its volumes at the time.

Nutrien on Wednesday said it was indefinitely pausing the plan for the big ramp up.

The price of potash has drifted down to approximately US$328 a tonne, compared with a peak of US$1,200 reached in April, 2022.

Nutrien’s Toronto Stock Exchange-listed shares have fallen by 15 per cent over the past year.

The company’s adjusted earnings per share in the second quarter came in at US$2.53 a share, far weaker than the Refinitiv estimate of US$2.77 a share.

Nutrien also said it is suspending work on a new ammonia plant it had planned to build in Geismar, La. in part because of higher than expected capital costs.

The big Canadian fertilizer company competes with Tampa-based The Mosaic Company MOC-CN unchno changeand Genmany’s K&S AG in its home province of Saskatchewan, and in a few years will go head-to-head with Anglo-Australian mining giant BHP Group Inc BHPLF -0.64%decrease, which is building a massive new potash mine called Jansen.

George Weston Ltd. WN-T +0.37%increase says its latest quarter delivered a profit attributable to common shareholders of $498-million.

The company, which holds large stakes in Loblaw Cos. Ltd. L-T +0.51%increase and Choice Properties Real Estate Investment Trust, says the second-quarter profit was almost 22 per cent lower than the earnings it reported a year earlier.

The company says the decrease was primarily driven by unfavourable liabilities linked to Choice Properties.

George Weston says its adjusted net earnings available to common shareholders totalled $377-million for the period ended June 30, up from $328-million a year before.

On an adjusted basis, George Weston says it earned $2.68 a diluted share, up from an adjusted profit of $2.23 a diluted share a year earlier.

Revenue for the quarter totalled $13.88-billion, up from $12.97-billion in the same quarter last year.

George Weston says its results were buoyed by increased sales at Loblaw and Choice Properties’ plans to open 1.6 million square feet of industrial space and two residential projects this year.

Spin Master Corp. says it earned US$28 million in the second quarter, down from US$88.1 million a year earlier.

The Toronto-based toy and entertainment company says revenue was US$420.7 million, down from US$506.3 million during the same quarter last year.

Earnings per diluted share were 26 cents, down from 83 cents.

Toy revenue for the company was US$346.3 million, down from US$437.6 million last year.

Sales for toy products declined due to lower order volume, as Spin Master says customers reduced retail inventory levels.

Chief financial officer Mark Segal said while the company’s results were challenged compared with last year, it’s maintaining its 2023 outlook.

Gildan Activewear Inc. (GIL) on Thursday reported second-quarter profit of $155.3 million.

On a per-share basis, the Montreal-based company said it had net income of 87 cents. Earnings, adjusted for non-recurring gains, were 63 cents per share.

The results surpassed Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 61 cents per share.

The apparel maker posted revenue of $840.4 million in the period, also exceeding Street forecasts. Three analysts surveyed by Zacks expected $822 million.

Canadian Natural Resources Limited (TSX: CNQ) (NYSE: CNQ) announces that its Board of Directors has declared a quarterly cash dividend on its common shares of C$0.90 (ninety cents) per common share. The dividend will be payable on October 5, 2023 to shareholders of record at the close of business on September 15, 2023.

Canadian Natural’s growing and sustainable dividend demonstrates the confidence that the Board of Directors has in the sustainability of our business model, the strength of our balance sheet and the Company’s long life low decline asset base. The previously announced increase in March 2023 represents the continuation of the Company’s leading track record of 23 consecutive years of dividend increases, with a compound annual growth rate of approximately 21‍% over that period of time.

Canadian Natural is a senior oil and natural gas production company, with continuing operations in its core areas located in Western Canada, the U.K. portion of the North Sea and Offshore Africa.