Pilipinas Shell returns to profit in 3rd quarter

PILIPINAS Shell Petroleum Corp. on Tuesday posted a net income of P1.29 billion in the third quarter, largely fuelled by the lower cost of sales during the period, reversing the P632.51million loss it incurred in the same quarter last year.

The higher income comes despite the newly listed company recording a 12% drop in net sales during the July-September period to P35.13 billion, from the previous year’s P39.7 billion, the company’s quarterly financial report shows.

In its filing with the stock exchange on Tuesday, the company reported an 18% decline in its cost of sales to P29.8 billion, from the previous year’s P36.22 billion. The company was also able to bring down its selling, general and administrative expenses, as well as finance charges.

For the nine-month period, Pilipinas Shell said its net income “improved significantly” by 91% to P6.36 billion from P3.33 billion previously.

“This was driven mainly by higher marketing margins, lower cost of sales and lower operating costs,” the company said.

The improvement comes even as the nine-month net sales declined by 17.3% to P101.14 billion from P122.36 billion a year ago “primarily as a result of significantly lower product prices driven by the decrease in global oil prices,” it said.

Cost of sales decreased by 22.7% to P82.49 billion from P106.77 billion because of the slump in global crude prices and lower logistics and transhipment costs after the closure of the Pandacan depot. Gross profit rose by 19.7% to P18.66 billion from P15.59 billion.

“The improvement in gross profit was driven mainly by increased premium fuel penetration, volume growth in retail, transport cost optimization and lower operating expenses,” Pilipinas Shell said. —