Petron plans to raise P50 B from preferred shares issue

Oil giant Petron Corp. is looking to raise as much as P50 billion from the issuance of preferred shares as the company turns its focus on growing its operations with full recovery now within reach.

In a stock exchange filing, Petron said its board approved the public offer and issuance of preferred shares of up to P50 billion.

Petron said the features of the issuance would still be determined by its management, including the conduct of a written assent solicitation from stockholders with a record date of March 20, 2023 and closing of books by March 20 to 24, 2023.

“With our full recovery within our reach, we’ve returned our focus on growing the business and beefing up our operational framework to ensure our continued success and sustainability,” Petron president and CEO Ramon Ang said.

Petron plans to build and operate its own coco-methyl ester (CME) plant, which will allow the company to produce its own CME.

The CME plant will eliminate dependence on third-party suppliers and provide higher margins for diesel, the company said.

Petron has achieved a second straight year of growth despite navigating a still volatile industry environment.

Petron reported a sustained recovery momentum in 2022, ending the year with a net income of P6.7 billion, up nine percent from P6.1 billion a year ago.

“We’ve been consistent in our recovery, with our profits already at pre-pandemic levels over the past two years,” Ang said.

“We continue to note an increased and growing demand for our products even as we contend with pricing challenges, heavy competition, and the lingering effects of the pandemic,” he said.

Petron’s sales volume from its local and international operations rose for the second straight year to 112.81 million barrels, 37 percent higher than 2021’s 82.24 million barrels.

The company sold 68.53 million barrels in the Philippines alone, up from 47.9 million barrels in 2021.

Petron said its service station volumes in the Philippines and Malaysia posted a 26-percent growth as its gasoline and diesel products remained in high demand.

Combined commercial sales jumped by 30 percent on the back of continued recovery of the industrial and aviation sectors.

Petron said notable increases were recorded last year in the company’s sales of jet fuel, liquefied petroleum gas, and polypropylene products.

The company’s operating income for 2022 finished at P19.21 billion, exceeding the previous year’s P17.21 billion, despite external headwinds and lower prices in the second semester.

Petron said operating costs were well contained last year, aided by the continued optimization of the company’s refining assets.

In 2022, Petron said it followed through with its retail expansion program and logistics master plan in anticipation of future demand by continuing to open more stations in the Philippines and Malaysia.

It also welcomed more food and lifestyle locators to strengthen its non-fuel business and generate more sales.