Shell sets up to for capex next year

Leaning on a sustained investment path, Pilipinas Shell Petroleum Corporation has earmarked capital expenditures of US$80 million to US$100 million (or R4 billion-R5.0 billion) for year 2018.

That has been anchored on the company’s blueprinted network expansion of 50 to 70 stations annually plus investments for its refinery and in further shoring up its retail business segment.

“We will put up additional 50 to 70 stations, that has been our yearly target,” Shell Philippines Chief Executive Cesar G. Romero said, thus beefing up its current retail portfolio of 1,014 stations.

“Our business path is very, very predictable – that (capital outlay) will be balanced between retail, refinery and distribution,” he added.

On income target this year, he has not been very specific on numbers, but he indicated that their year-to-date income of R6.6 billion as of third quarter had already been 90-percent of what they posted in 2016.

Romero surmised that it would “definitely be better” at the company’s bottom line figures, with retail sales still seen picking up during the Christmas holiday season.

“Our year-to-date Q3 is already 90% of our full-year income in 2016, and we still have one quarter to go. I cannot disclose our target, but our commitment is, we try to grow our EBITDA (earnings before interest, taxes, depreciation and amortization) by R1 billion to R2 billion per year,” he said.

As has already been indicated, Shell is targeting completion of its $15 million bitumen facility by yearend or at the latest first quarter of next year.

Bitumen is a residue of petroleum distillation – and is often utilized for road surfacing or roofing thus it could be a good investment bet to underpin the government’s infrastructure development program.

The company noted that it already has sizeable market share in bitumen in the Philippines, and” we would want to continue further supporting that. For our bitumen, it used to be all imports,” Romero said.