Shell posts P5.5 B loss

Pilipinas Shell Petroleum Corp. (PSPC) incurred a P5.5 billion loss in the first quarter as it took a hit from the impact of the coronavirus disease 2019 or COVID-19 and the Taal Volcano eruption.

PSPC said the drop was due to the collapse in global oil prices, coupled with the slowdown in economic activity under a governmentimposed quarantine due to COVID-19.

In contrast, the company posted a net income of P2.4 billion in the first quarter of 2019.

Inventory holding losses, net of taxes, were substantial at P5.6 billion as crude oil price sank from $67 per barrel during the start of the year to $26 per barrel by end-March following the breakdown of production cuts discussion between the Organization of the Petroleum Exporting Countries (OPEC) and Russia.

“Our first quarter loss is disappointing given our robust overall performance last year and the strong marketing delivery from the start of 2020 up until mid-March,” PSPC president and chief executive officer Cesar Romero said in a statement.

Despite the Taal eruption, the oil firm said total volume was flat pre-quarantine versus same period last year.

But during the second half of March, post-quarantine volumes dropped by over 50 percent.

For the non-fuels retailing segment, PSPC said delivery remained flat versus last year as it established partnerships with delivery companies to transport non-fuels retail products to selected parts of the country during quarantine.

It opened five new Shell Select shops, five Shell Helix Oil Change (SHOC)+ and nine co-locators during the quarter.

In the commercial segment, pre-quarantine volume grew 16 percent year-on-year while increasing premium fuel penetration.

Post-quarantine volumes also saw a 20 percent increase as the operations of base load plant customers continued.

Lubricants saw a seven percent volume increase prequarantine, but dropped by over 50 percent during the second half of March. Despite the decline, it delivered higher income this quarter versus last year through increased premium penetration and increased wallet share from customers.

For the aviation sector, prequarantine volume was up 16 percent despite the suspension of all flights at the Ninoy Aquino International Airport (NAIA) last January 12 due to the Taal eruption.