That energy and mining companies were facing treacherous terrain last year is clear from the presence of just two players, EnCana Corp. and Teck Resources, among the 10 biggest earners. EnCana slipped from first to fifth, as earnings plunged 69%. But it stands as the only Top 10 returnee of the six oil and gas producers that reached those lofty heights the previous year. Canadian Natural Resources slid to 12th from second; Imperial Oil fell nine places to 13th; Husky Energy descended the ladder to 17th from sixth; and Talisman Energy plummeted 37 rungs to 45th, thanks to an 88% decline in earnings. Petro-Canada (No. 10 a year ago) disappeared because of a takeover, joining 105 other companies that left the list for one reason or another. Petrocan's buyer, Suncor Energy, occupies 22nd place on the list, down from 11th.
Teck rode the metals rebound and a cleaned-up balance sheet to seventh spot, with a 178% jump in profit. A year earlier, Teck stood 44th. But Potash Corp. of Saskatchewan dove 17 places to 24th, and gold powerhouse Barrick Gold plunged all the way to the bottom, 1,000th out of 1,000, after finishing 36th the year before. Which can happen to any company whose earnings, at least on paper, sink by 644%. This one-time event stems from a multibillion-dollar accounting charge related to the unwinding of its costly hedging program. A hedge-free Barrick will be able to take full advantage of gold prices that have surged in response to new investor fears of just about everything else. The company has already reported a record first quarter for this year.
But the bottom 50 is laced with other resource players that lack Barrick's considerable financial muscle. The Biggest Losers club includes the likes of Penn West Energy Trust, which plummeted to 969th from 27th; Ultra Petroleum at No. 993 (down from 56); Harvest Operations at 996 (from 84th); Equinox Minerals at 981 (89); and Just Energy Income Fund, 997 (106).
Some of the juniors were dependent on new financing that failed to materialize. "They're all part and parcel of the same problem," Arthur Heinmaa declares. "When you've got a company that's burning money, you're basically on the clock. You've got to produce. And if there's any problem at all, there's no staying power."
Or as another song (this one from those astute economic analysts at Monty Python LLC) so deftly encapsulates corporate life in these tumultuous times:
There is nothing quite as wonderful as money. There is nothing quite as beautiful as cash. Some people say it's folly, But I'd rather have the lolly. With money you can make a splash.