Phoenix cuts 2021 capex to ₧800M
Phoenix Petroleum Philippines inc. has slashed its capital expenditure (capex) this year to P800 million to conserve cash and rationalize spending. “Capex this year is historically lower as we focus our expansion plans, making most out of our existing assets, and on our capital line strategy,” said Phoenix Petroleum Vice President for external Affairs Raymond Zorrilla.
The oil company already slashed its 2020 capex by half to P1.5 billion to conserve cash while the country is grappling with a health crisis. it originally programmed a capex of P3 billion last year.
This year’s capex, which would be sourced from internal funds, includes carry-over capex from 2020 and growth capex for LPG and retail. Phoenix Petroleum’s LPG business has been a major revenue driver for the company. The oil firm ended 2020 with P63-million net income, largely attributed to its strong LPG business that saw a 32-percent year-on-year volume growth. Phoenix’s bullishness extends to its overseas ventures as well, with triple volume growth recorded in Vietnam by its subsidiary Phoenix Gas Vietnam LLC.
The LPG segment has also proven to be a bright spot despite the ongoing Covid-19 pandemic with cooking fuel deemed an essential by Filipino consumers. its LPG market share has improved with the launch of Phoenix Super LPG that caters to low-income consumers. it is more lightweight and less expensive. With a capacity of 200 grams of fuel, it can provide up to two hours of cooking time depending on its use.
This canister format aims not only to make the cooking fuel more affordable for Filipinos but to enhance household safety as well, encouraging users to move away from traditional wood, kerosene or charcoal fuel, as well as single-use butane canisters.
Latest data on the overall Philippine LPG industry has further shown an uptrend in Phoenix SUPER LPG market share from 4.49 percent in 2017 to 4.84 percent in 2018 and 5.61 percent in 2019. The oil firm’s market share is estimated at 6.87 percent as of third quarter of 2020. While incremental, Phoenix is the only firm that has exhibited an uptick in market share in recent years, with all other players showing a downtrend in the past 10 years.
The canister format was launched under a partnership with Philippine eco-gas Producer Cooperative (PEPC). As of December 2020, PEPC estimates total output of 500,000 stainless steel canisters and 200,000 aluminum canisters in Visayas and Mindanao.