Rich Kruger the former head of Imperial Oil Ltd., will take the reins of the Suncor Energy Inc. on April 3.Jeff McIntosh/The Canadian Press
Suncor Energy Inc. SU-T has gone outside the company to choose a new chief executive officer, appointing oil and gas veteran Rich Kruger to the top job as it bows to pressure from U.S.-based activist investor Elliott Investment Management LP.
Mr. Kruger, the former head of Imperial Oil Ltd. IMO-T, will take the reins of the Calgary-based energy giant on April 3, following a months-long search to replace Mark Little, who resigned as CEO last July, following a spate of safety incidents and worksite fatalities.
Two of the directors serving on Suncor’s CEO search committee were named to its board last July, as part of a deal the company struck to appease Elliott.
A source familiar with Elliott told The Globe and Mail that the hedge fund was pleased the board went with an external CEO candidate, which is what the firm believes Suncor needs to achieve necessary safety and operational improvements.
The source said Elliott looks forward to Mr. Kruger’s progress in delivering on a new culture at Suncor, specifically focusing on enhancing safety, operational efficiency and overall better performance. The Globe is not naming the source because they are not permitted to speak publicly for Elliott.
Mr. Kruger was president and CEO of Imperial from 2013 until his retirement in 2019, the culmination of his 39-year career with U.S. parent company Exxon Mobil Corp XOM-N.
Under his leadership, Imperial sold off close to 500 company-owned Esso retail stations in Canada in 2016, bolstering profits.
Suncor owns one of the country’s largest networks of gas stations, with 1,800 Petro-Canada locations. Elliott pushed Suncor in April to review its retail division, arguing it represented $5-billion in “trapped value.”
However, following a four-month review, Suncor said in November it would retain the assets, arguing that it could extract more value by keeping the familiar brand and streamlining operations as gasoline demand wanes in the coming decades, than by selling it.
While at Imperial, Mr. Kruger focused sharply on safety, reliability and operational excellence, Bank of Nova Scotia analyst Jason Bouvier said in a research note on Tuesday.
Mr. Bouvier said Mr. Kruger’s appointment was a positive change for Suncor, particularly because the new CEO “brings considerable oil sands experience and a strong history of operational safety to the role.”
Many analysts believe Elliott was pushing for new leadership at Suncor. However, Eight Capital analyst Phil Skolnick said the naming of Mr. Kruger was a surprise.
“While there was speculation that an outsider was about to be named as the new president and CEO, this was not a name thrown out there in recent conversations with investors,” Mr. Skolnick said in a note.
Mr. Skolnick added Mr. Kruger was “held in high regard” by the investment community during his time at Imperial, and said investors are likely to expect a “complete positive change” in the safety culture at Suncor under his leadership.
Mr. Kruger was one of the most outspoken critics of Canadian federal and provincial energy policy during his time as Imperial CEO – a vastly different approach than that of Mr. Little when he was at the helm of Suncor.
Mr. Kruger often complained publicly about red tape, focusing in the years before his retirement on how long it took to win Alberta regulatory approval for the two-phase, 150,000-barrel-per-day Aspen thermal oil sands project, first proposed in 2013.
Imperial announced it would go ahead with Aspen late in 2018, within months of finally winning approval for the $2.6-billion project. But it was put on hold in March, 2019, because of what Mr. Kruger called market uncertainty caused in part by the then-NDP provincial government’s oil production curtailment program, enacted in January of that year to reduce a glut of oil trapped in the province by output outgrowing pipeline capacity.
Mr. Kruger’s appointment will see interim Suncor CEO Kris Smith shuffled to the role of chief financial officer and executive vice-president of corporate development at the conclusion of the company’s annual general meeting on May 9.
Current CFO Alister Cowan plans to retire, but has offered to remain with the company through the end of the year to support the leadership transition and provide advisory services.
RBC analyst Greg Pardy said in a note on Tuesday that Mr. Smith remaining in a leadership role “lays a clear CEO succession path.”
HALIFAX – Ottawa is negotiating a $500-million bailout for Nova Scotia’s privately owned electric utility, saying the money will be used to prevent a big spike in electricity rates.
Federal Natural Resources Minister Jonathan Wilkinson made the announcement today in Halifax, saying Nova Scotia Power Inc. needs the money to cover higher costs resulting from the delayed delivery of electricity from the Muskrat Falls hydroelectric plant in Labrador.
Wilkinson says that without the money, the subsidiary of Emera Inc. would have had to increase rates by 19 per cent over “the short term.”
Nova Scotia Power CEO Peter Gregg says the deal, once approved by the province’s energy regulator, will keep rate increases limited “to be around the rate of inflation,” as costs are spread over a number of years.
The utility helped pay for construction of an underwater transmission link between Newfoundland and Nova Scotia, but the Muskrat Falls project has not been consistent in delivering electricity over the past five years.
Those delays forced Nova Scotia Power to spend more on generating its own electricity.
This report by The Canadian Press was first published Sept. 16, 2024.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
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