Suncor stock climbs as CEO celebrates cost cuts

Suncor Energy (SU.TO)(SU) shares climbed on Thursday as CEO Rich Kruger boasted that his plan to slash jobs and cut costs has worked out better than expected for the Canadian oilsands giant.

The former Imperial Oil (IMO.TO)(IMO) boss officially took the top job at Suncor in April. He made good on a promise in June to “eliminate work” at the company, announcing a plan to save $400 million by cutting 1,500 jobs by the end of the year. Suncor booked a $275 million restructuring charge as a result in August.

“Today, I can share that this effort has been completed two months ahead of schedule,” Kruger told analysts on a post-earnings conference call Thursday morning. “We are a simpler, more focused organization positioned to compete and win, and that's exactly what we intend to do.”

Kruger says Suncor will realize $450 million in annual cost reductions beginning in 2024, $50 million more than he forecast when the plan was introduced. He acknowledges the related personnel changes “haven’t been easy on our organization.”

Last November, Suncor announced it would slash its contractor workforce in the mining and upgrading business by 20 per cent as part of its effort to improve safety and performance.

Peter Zebedee, Suncor’s executive vice-president of oilsands, confirmed on Thursday that this reduction was completed earlier this year, while suggesting further cuts could be made.

“We've taken a lot of the waste out of the system so far,” he said on the call. “I continue to believe that there are more efficiencies in our contractor base across the breadth of our operations.”

Toronto-listed shares climbed 4.74 per cent to $45.34 as at 11:22 a.m. ET on Thursday, after rising more than five per cent in early trading.

Suncor reported third-quarter financial results after the closing bell on Wednesday, booking a net profit of $1.54 billion on strong refining margins and higher sales volumes from its oilsands operations.

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.

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