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SUN Wildflower Brands Inc

0.15
0.00 (0.00%)
24 May 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type
Wildflower Brands Inc CSE:SUN CSE Common Stock
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 0.15 0.15 0.16 0 01:00:00

Sunoco To Halve Dividend, Idle NJ Plant, Furlough 400 Workers

06/10/2009 10:03pm

Dow Jones News


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Sunoco Inc. (SUN) cut its dividend in half and said it would shut a New Jersey refinery indefinitely, shifting its production to two nearby sites.

Both actions, taken because "the operating environment continues to be very poor," are expected to save the big oil refiner a total of $320 million a year.

Sunoco, the second-largest U.S. independent oil refiner by volume after Valero Energy Corp. (VLO), has been cutting costs and is trying to sell its chemicals operations as the recession cuts demand.

About 400 workers will be furloughed while the Eagle Point refinery in Westville is closed, but they may return to work if it reopens and Sunoco will continue to pay its contribution to medical benefits as well as offer job placement assistance and retraining.

Closing the plant will boost utilization at the two nearby ones and save the company about $250 million a year. Sunoco is expected to post a charge of $475 million to $550 million related to an asset impairment and the costs of idling the plant. Most of the charge will be taken in the third quarter.

The quarterly dividend will be lowered to 15 cents starting in the first quarter to preserve capital, add flexibility and brings Sunoco's yield more in line with its peers. The cut is expected to save the company $70.1 million a year.

Sunoco said the plant closure would not affect its ability to meet lower customer demand and it may reopen the plant if the market improves. The company also said it would consider using the idled plant to produce alternative fuels.

"Given weak industry dynamics, we are confident we are taking the right actions to improve our overall competitiveness, set the stage for investing in our strong regional brand, explore opportunities in biofuels, and provide customers with a broader choice of transportation fuel options," said Chairman and Chief Executive Lynn Elsenhans.

In the second quarter, Sunoco swung to a loss as higher prices for crude oil and weak demand ate into margins and revenue.

Sunoco's shares fell 2.8% to $27.10 in after-hours trading. The stock has lost more than a third of its value this year but is flat with a year ago.

-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357; Kathy.Shwiff@dowjones.com

 
 

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