New Suncor CEO Kruger focused on cost-cutting, will ‘play to win’
The new prime boss at Suncor Energy Inc. says he has a pointy concentrate on cost-cutting as he embarks on the duty of enhancing efficiency on the oilsands big.
Rich Kruger, who took over as Suncor’s new CEO on April 3, pledged Tuesday that the corporate will change into a “simpler and more focused organization” below his management.
On a convention name with analysts to debate the corporate’s first-quarter monetary outcomes, he promised to be candid, clear, and function with a “sense of urgency” as he seeks to fulfil his mandate to make adjustments on the Calgary-based firm.
“I consider myself to be reasonably decisive, and very competitive,” Kruger mentioned. “I play to win.”
A well-recognized face within the Canadian oilpatch, Kruger led Imperial Oil Ltd. as president and CEO from 2013 till his retirement in 2019. His time on the helm of Imperial Oil was the end result of his 39-year profession with mother or father firm ExxonMobil Corp.
Kruger’s appointment to the highest job at Suncor – changing interim CEO Kris Smith, who stepped in to fill the function after Mark Little resigned in July 2022 – got here after months of investor stress within the wake of a spate of office deaths and security incidents, manufacturing challenges, and a lagging share value.
Kruger mentioned Tuesday that in his first 5 weeks on the job, he has visited half of the corporate’s main services and met with employees and administration.
While he mentioned Suncor is a proud firm with glorious individuals and high-quality property, he believes it has untapped potential.
“I see a gap between our current performance and what I would consider best-in-class in many, many areas,” he mentioned.
He additionally talked up the significance of “organizational efficiency” and prompt that there are methods to trim the corporate and cut back prices.
“I think we can eliminate work. I think we can do away with work that doesn’t add value,” he mentioned, including that each one workers want to contemplate how their function helps to generate income for Suncor.
“I very much believe in making money. We are in the business to make money and as much of it as possible, and everybody starting with me needs to see how they do that,” Kruger mentioned.
Kruger’s potential to show across the flagging fortunes of 1 Canada’s largest vitality firms will likely be closely scrutinized by many – together with U.S.-based activist investor Elliott Investment Management, which had been pushing for change on the prime of Suncor.
Two of the board administrators serving on the CEO search committee that recruited Kruger had been named to Suncor’s board final summer season, as a part of a deal the corporate struck to appease Elliott Investment Management.
Elliott publicly expressed frustration final spring at what it referred to as a latest decline in efficiency on the vitality producer.
The activist investor additionally criticized Suncor for its security document. At least 12 employees have died on the firm’s oilsands operations in northern Alberta since 2014, and former CEO Little resigned simply sooner or later after the latest fatality.
Interim CEO Smith will assume the function of chief monetary officer and government vice-president of company growth later Tuesday after Suncor’s annual normal assembly.
Alister Cowan, the present CFO, is about to retire on the finish of the yr.
Suncor, which reported its first-quarter earnings after the shut of markets on Monday, mentioned it earned $2.05 billion within the first quarter of 2023, down from $2.95 billion in the identical quarter of 2022.
The Calgary-based vitality big’s web earnings included a $302-million acquire on the sale of the corporate’s wind and photo voltaic property, which the corporate lately offered to Canadian Utilities Ltd. for $730 million.
On an adjusted foundation, Suncor says its working earnings for the primary quarter had been $1.81 billion, or $1.36 per frequent share, a 34-per-cent lower year-over-year.
The firm says the lower in earnings was primarily because of decreased crude oil realizations, elevated working bills, decrease upstream manufacturing and refinery throughput and weakening crude oil costs.
This report by The Canadian Press was first printed May 9, 2023.
