Connect with us

Business

Exxon posts record loss, warns of epic $30bn shale writedown – Aljazeera.com

Published

 on


Energy giant Exxon Mobil Corp is facing its biggest crisis since the 1970s as the pandemic guts oil and gas demand.

Exxon Mobil Corp. warned it may take up to $30 billion in writedowns on natural gas fields as crashing energy demand and prices spurred a historic losing streak.

Exxon is confronting one of its biggest crises since Saudi Arabia began nationalizing its oilfields in the 1970s. If the company takes the full $30 billion impairment, it will be the industry’s worst in more than a decade, according to Bloomberg data.

The company lost $680 million, or 15 cents a share, during the third quarter, compared with the 25-cent per-share loss forecast in a Bloomberg survey of analysts. The shares fell 1.3% to $32.53 at 9:34 a.m. in New York and are down more than 50% for the year.

That was in stark contrast to Chevron Corp., which disclosed a surprise profit as the company’s oil-production and refining divisions outperformed analysts’ expectations. Chevron’s shares dipped 0.4%. European supermajors Total SE, Royal Dutch Shell Plc and BP Plc also turned in better-than-expected third-quarter performances.

Blindsided by the economic fallout from the Covid-19 pandemic, Exxon Chief Executive Officer Darren Woods abruptly ditched an ambitious rebuilding effort and imposed widespread job cuts that are unprecedented in Exxon’s modern history. His top priority has been preserving a dividend that pays shareholders $3.7 billion every three months.

The firings and layoffs announced Thursday will affect 14,000 workers in the U.S. and abroad. Pandemic-induced lockdowns have crushed demand for oil, natural gas and chemicals, sending Exxon’s finances into a tailspin. Prior to 2020, the company hadn’t posted a quarterly loss in at least three decades.

Woods’s turnaround effort took another hit Friday when the company said an internal assessment is under way to determine the future of its North American gas assets. Much of those fields were added to Exxon’s portfolio a decade ago with the $35 billion takeover of XTO Energy Inc., when American gas prices were almost twice the current level.

Oil Sands

The company may incur additional impairments on assets in Canada, where operations include the massive Kearl oil-sands complex in Alberta. Although third-quarter results outperformed expectations, the company is still struggling to generate enough cash to fund dividend payments and capital projects.

Exxon’s cash flow has all but evaporated, Woods’s aggressive rebuilding plan has ground to a halt, and criticism is growing over the company’s climate strategy. The most immediate question for investors is how long the $15 billion a year in dividends survive.

What Bloomberg Intelligence Says

Exxon appears poised to wait for peers to drop, before it takes the necessary step of cutting its dividend. Regardless of a recovery, its capital structure looks unsustainable, as its portfolio requires significant spending to restore returns.

— Fernando Valle, energy analyst

Meanwhile, Chevron and BP eked out profits after slashing costs. Shell exceeded all analysts’ forecasts by posting almost $1 billion in adjusted profit. The Anglo-Dutch giant also dangled the promise of fattening the dividend that’s dwindled to less than half of its year-ago value. also surpassed estimates.

Exxon stock has underperformed Chevron but outpaced Shell and BP. The drop has sent Exxon’s dividend yield soaring to more than 10%, a level that indicates investors expect the payout to be cut.

To defend the dividend and appease investors, Woods is implementing an extensive internal cost-cutting drive. Exxon cut $10 billion in capital spending in April and said Friday that 2021 spending will fall as much as another $7 billion.

As if its financial performance wasn’t enough to worry about, Exxon is under pressure from critics to reset its climate strategy. Its European rivals have all committed to some form of carbon neutrality by mid-century but earlier this month Woods underscored his faith in fossil fuels. Oil and gas will still make up about half the global energy mix in 2040 and provide the most cost-effective pathway to development in poor countries, Woods told employees in the email.

(Updates share prices in third, fourth paragraphs)
–With assistance from Laura Hurst and Javier Blas.

Let’s block ads! (Why?)



Source link

Continue Reading

Business

Nav Canada warns air traffic controllers that job cuts are coming as pandemic crushes revenue – CBC.ca

Published

 on


Air traffic controllers are being warned that layoffs are coming as Nav Canada pursues a “full restructuring” in response to a revenue slump caused by the COVID-19 pandemic, CBC News has learned.

CBC News has obtained a confidential memo sent internally to air traffic controllers on Thursday. In it, Ben Girard, Nav Canada’s vice-president and chief of operations, told staff that the company has seen a $518 million drop in revenue compared to its budget.

He said he’s been pushing the federal government for help, but — unlike some other countries — Canada has not released an industry-specific bailout package yet.

“We anticipate that until air traffic returns to higher levels, which will not occur until the end of this fiscal year, we will continue to operate in a daily cash negative position and this will be made worse as funding from the [Canadian Emergency Wage Subsidy] program is ratcheted back,” Girard wrote. 

Girard did not say in the memo how many air traffic controllers will lose their jobs or which locations will be affected. The memo said it’s looking to reduce the number of “IFR controllers.” These controllers are higher on the pay scale and work at area control centres in Gander, N.L., Moncton, N.B., Montreal, Winnipeg, Toronto, Edmonton and Vancouver.

The workers are responsible for controlling large amounts of airspace between airports using radar. Their job is to make sure planes keep proper distance from one another.

“I know this is very difficult news to hear. It is also very difficult news to deliver,” Girard wrote. “This is a decision that has been made at my level based on what needs to be done to ensure Nav Canada’s financial sustainability.”

Nav Canada manages millions of kilometres of airspace over Canada and used to provide air navigation services for more than three million flights a year. It’s funded through service fees paid by air carriers.

The Canadian Air Traffic Control Association said it is very concerned with the memo. 

“It is the opinion of this union that safety is not being taken into consideration in making sound decisions,” president Doug Best and executive vice-president Scott Loder wrote in a letter to members.

“Safety is the number one priority for Nav Canada and it has somehow taken a backseat to cost containment as the number one and only priority.”

‘We’re facing years of a downturn in air traffic’

In November, Canadian air traffic was down 54 per cent compared with the same time period in 2019, according to the memo.

“Over the summer and fall months, the outlook for the aviation industry has deteriorated significantly and it has become increasingly clear that we’re facing years of a downturn in air traffic that is much larger and broader in scope than we all initially believed, and will be much deeper and longer than any downturn in the history of the industry,” Girard wrote.

Nav Canada says it is conducting studies of air traffic control towers in Whitehorse, Regina, Fort McMurray in Alberta, Prince George in B.C., and Sault Ste. Marie and Windsor in Ontario that “will result in workforce adjustments.” The company is also looking into closing a control tower in St. Jean, Que.

Nav Canada air traffic controllers were told on Thursday that a workforce adjustment is coming because ‘the aviation industry has deteriorated significantly.’ (Jonathan Hayward/The Canadian Press)

Government ‘pressed’ for help 

The company has been focused on securing liquidity and tapped into the Canada Emergency Wage Subsidy (CEWS) to pay up to 75 per cent of employees’ wages, he wrote. Girard added that these payments are being reduced and will run through December, but Nav Canada isn’t sure if it can continue receiving that wage support.

“While an extension for the CEWS program through June 2021 was recently announced, NAV CANADA’s eligibility is uncertain,” he wrote.

Girard said the federal government has so far failed to come up with a bailout package for the airline sector, despite “significant lobbying.”

Last month, the Globe and Mail reported that the federal cabinet is working on a package for the airline sector that would include low-interest loans. 

Since Sept. 22, Girard wrote, the company has cut more than 700 managers and employees — 14 per cent of its workforce. It also let go of 159 students earlier in the pandemic, he added, and in November cut even more, “leaving just a few in the system.”

Along with the cuts, seven air traffic control towers are being considered for a downgraded level of service, and another 25 sites that are already Flight Service Stations — which provide only advisory services — could face more cuts.

Nav Canada’s board of directors has cut its fees by 20 per cent, and executives and managers have dropped their salaries by up to 10 per cent, Girard wrote.

These cost reductions, as well as access to government support through the wage subsidy program, have saved the company $200 million since March 1, he added. 

“However, that number still pales in comparison to the $518 million reduction in revenues as compared to budget,” Girard wrote.

“Despite these cost-containment efforts, we find ourselves in a situation where we expect our revenues to continue falling far short of our costs for several years, and we continue to require further cost-containment measures and indeed, a full restructuring of our business.

“In an environment where 30 per cent of costs are associated with ‘things’ and 70 per cent of costs are associated with ‘people,’ when all possible cuts with ‘things’ have been done, any further cuts will directly affect people.”

Girard added that he hopes the company can bring back some of the laid-off staff once the pandemic passes.

The Canadian Air Traffic Control Association said it will continue to challenge Nav Canada. The union hopes there will be “enough interest” in departure incentives for older controllers to offer them a package to retire. 

“The views of Nav Canada at this point are violating the vision, mission and overarching objectives of this company,” Best and Loder said in their letter to members.

Let’s block ads! (Why?)



Source link

Continue Reading

Business

Nav Canada warns air traffic controllers that job cuts are coming as pandemic crushes revenue – CBC.ca

Published

 on


Air traffic controllers are being warned that layoffs are coming as Nav Canada pursues a “full restructuring” in response to a revenue slump caused by the pandemic, CBC News has learned.

CBC News has obtained a confidential memo sent internally to air traffic controllers today. In it, Ben Girard, Nav Canada’s vice president and chief of operations, told staff that the company has seen a $518 million drop in revenue compared to its budget.

He said he’s been pushing the federal government for help but — unlike some other countries — Canada has not released an industry-specific bailout package yet.

“We anticipate that until air traffic returns to higher levels, which will not occur until the end of this fiscal year, we will continue to operate in a daily cash negative position and this will be made worse as funding from the [Canadian Emergency Wage Subsidy] program is ratcheted back,” Girard wrote. 

Girard did not say in the memo how many air traffic controllers will lose their jobs, or which area control centres will be affected.

“I know this is very difficult news to hear. It is also very difficult news to deliver,” he wrote. “This is a decision that has been made at my level based on what needs to be done to ensure Nav Canada’s financial sustainability.”

‘We’re facing years of a downturn in air traffic’

Nav Canada manages millions of kilometres of airspace over Canada and used to provide air navigation services for more than 3 million flights a year. It’s funded through service fees paid by air carriers.

In November, Canadian air traffic was down 54 per cent compared to the same time period in 2019, according to the memo.

“Over the summer and fall months, the outlook for the aviation industry has deteriorated significantly and it has become increasingly clear that we’re facing years of a downturn in air traffic that is much larger and broader in scope than we all initially believed, and will be much deeper and longer than any downturn in the history of the industry,” wrote Girard.

Nav Canada says it is conducting studies of air traffic control towers in Whitehorse, Regina, Fort McMurray in Alberta, Prince George in B.C., and Sault Ste. Marie and Windsor in Ontario which “will result in workforce adjustments.” The company also is looking into closing a control tower in St. Jean, Quebec.

Nav Canada air traffic controllers were told today a workforce adjustment is coming because “the aviation industry has deteriorated significantly.” (Jonathan Hayward/Canadian Press)

Government ‘pressed’ for help 

The company has been focused on securing liquidity and tapped into the Canadian Emergency Wage Subsidy to pay up 75 per cent of employees wages, he wrote. Girard added these payments are being reduced and will run through December, but Nav Canada isn’t sure if it can continue receiving that wage support.

“While an extension for the CEWS program through June 2021 was recently announced, NAV CANADA’s eligibility is uncertain,” wrote Girard.

Girard said the government has so far failed to come up with a bailout package for the airline sector, despite “significant lobbying.”

Last month, the Globe and Mail reported the federal cabinet is working on a package for the airline sector that would include low-interest loans. 

Since September 22, Girard wrote, the company has cut more than 700 managers and employees — 14 per cent of its workforce. It also let go 159 students earlier in the pandemic, he added, and in November cut even more, “leaving just a few in the system.”

Along with the cuts, seven air traffic control towers are being considered for a downgraded level of service and another 25 sites that are already Flight Service Stations — which provide only advisory services — could face more cuts.

Nav Canada’s board of directors has cut its fees by 20 per cent, and executives and managers have dropped their salaries by up to 10 per cent, Girard wrote.

These cost reductions, and access to government support through the wage subsidy program, have saved the company $200 million since March 1, he added. 

“However, that number still pales in comparison to the $518 million reduction in revenues as compared to budget,” wrote Girard.

“Despite these cost-containment efforts, we find ourselves in a situation where we expect our revenues to continue falling far short of our costs for several years, and we continue to require further cost-containment measures and indeed, a full restructuring of our business.

“In an environment where 30 per cent of costs are associated with ‘things’ and 70 per cent of costs are associated with ‘people’, when all possible cuts with ‘things’ have been done, any further cuts will directly affect people.”

Girard added that he hopes the company can bring back some of the laid-off staff once the pandemic passes.

Let’s block ads! (Why?)



Source link

Continue Reading

Business

Windsor-Essex COVID-19 numbers already in 'red' status, says health unit – Windsor Star

Published

 on


Article content continued

Of those new cases, 19 are close contacts of previously confirmed case, five are workers in the agri-farm sector, two are related to travel to the U.S., two were the result of community transmission, and 14 remain under investigation.

As of Wednesday, Windsor-Essex has 341 active cases of the novel coronavirus. 3,005 local cases are considered resolved.

To date, there have been 77 local deaths related to COVID-19.

There are currently outbreaks associated with five long-term care facilities or retirement homes, two agri-farm workplaces, two schools, two residential buildings (Riverplace Residence and Victoria Manor), and one place of worship.

Theresa Marentette, CEO and chief nursing officer of the WECHU, said on Wednesday that the outbreak at Frank W. Begley Public School now involves 43 cases of COVID-19, while the outbreak at W. J. Langlois Catholic Elementary School remains at four cases.

Investigation and analysis of the school outbreaks are ongoing.

Late Wednesday, the Windsor-Essex Catholic District School Board announced that it had dismissed a cohort of 24 students from Corpus Christi Catholic Middle School in the city’s east end after receiving notification of a confirmed case of COVID-19.

The confirmed case was part of the Sports Academy program at Central Park Athletics and didn’t attend the main campus of Corpus Christi, the separate school board said in a news release.

The Applebee’s Restaurant location at 2187 Huron Church Rd. in Windsor is shown in this October 2018 Google Maps image. Photo by Google Maps /Windsor Star

Other recent public exposure notifications include an Applebee’s Restaurant in Windsor (2187 Huron Church Rd., Unit 240) and Tabouli by Eddy’s, a restaurant in Tecumseh (1614 Lesperance Rd., Unit 5).

The potential exposure dates and times at the Applebee’s were: Nov. 19, 11:30 a.m. to 5 p.m.; Nov. 21, 3 p.m. to 9 p.m.; and Nov. 22, 11:30 a.m. to 4 p.m.

The potential exposure dates and times at Tabouli by Eddy’s were: Nov. 17, 2 p.m. to 10 p.m.; Nov. 21, 5 p.m. to 10 p.m.; and Nov. 22, 2 p.m. to 7 p.m.

Previous public exposure locations named this month include RIA Financial in Leamington (54 1/2 Erie St. South), Deer Run Church in Leamington (1408 Deer Run Rd.), and Food Basics in Tecumseh (1655 Manning Rd.).

Visit wechu.org for more information about the COVID-19 situation in Windsor-Essex.

dchen@postmedia.com

The Windsor-Essex County Health Unit’s list of potential COVID-19 exposure locations in the region, as of Nov. 25, 2020. Photo by Windsor-Essex County Health Unit /Windsor Star

Let’s block ads! (Why?)



Source link

Continue Reading

Trending