Strong LPG sales fuel Pryce profit in 2017

PRYCE CORP. posted a 29% increase in net income in 2017, driven by higher revenues from sales of liquefied petroleum gas (LPG), the company told the stock exchange on Wednesday.

The listed firm, which imports and distributes LPG under the brand name PryceGas among its businesses, said last year’s P1.25billion profit was within its target.

Consolidated revenues rose 37% to P9.23 billion in 2017 from P6.72 billion, with sales volume growing by double-digits after the increase in LPG prices last year.

“Sales volume of LPG grew 11% to 210,000 metric tons (MT) from the previous year’s 189,000 MT. Despite this modest volume growth, revenues were up 37% because of the sharp increases in LPG contract prices during the year,” the company said.

In 2017, contract prices averaged $491 per MT, 42% or $145 higher than the previous year’s average of $346 per MT.

“Volume growth was achieved mainly in the Visayas and Mindanao ( VisMin) regions, where demand is more concentrated on fuel for household cooking. Sales in the VisMin regions experienced a 22% year-on-year volume growth as compared to about 4% volume growth in Luzon,” Pryce said.

In value, sales of LPG along with cylinders and accessories stood at P8.67 billion, making up 94% of total revenues. Industrial gas sales amounted to P391.5 million, or 4% of revenues. Sales of real estate as well as pharmaceutical products accounted for the rest.

For 2018, Pryce said it would continue its expansion projects to increase the storage capacities of its marine terminals. The move, which was started about two years ago, is also aimed at bringing its products closer to the markets.

The company said all of its seven VisMin import terminals had been or would be expanded to allow each one to accommodate at least one shipload of 2,500 MT cargo.

It said the expansion of its terminals in Albuera, Leyte as well as in Sta. Cruz, Davao del Sur had been completed last year. It expects the expansion of the LPG terminals in Sogod, Cebu and Balingasag, Misamis Oriental to be completed by July and August 2018.

Pryce said the ability to discharge a shipload in a single terminal would reduce its import costs by $10 to $20 per MT.

The company will build at least 15 refilling plants in VisMin areas to make its product closer to consumer markets.

“These expansions are expected to be completed by the end of 2019 and all are funded from internally generated funds,” the company said.

For 2018, the company expects sales volume to increase by 15% and profit to rise by 20%. It attributed the target to the expansion projects and the implementation of Republic Act 10963 or Tax Reform for Acceleration and Inclusion (TRAIN) Law.

In particular, Pryce said net income is targeted to reach P1.55 billion “plus or minus 10%” for this year. —