Strong performance of units allows Phoenix to post profit
Phoenix Petroleum Philippines inc. swung back to profit in the January-to-march period mainly due to the strong performance of its businesses here and abroad.
Net income in the first quarter stood at P121.3 million, a reversal of the P386-million net loss in the same period a year ago. Overall volume was 43-percent higher year-onyear supported by the fast-growing LPG (liquefied petroleum gas) cylinder business and the strong rebound in the commercial and other B2B segments.
Volume from overseas subsidiaries more than doubled during the period. The overseas business, led by the trading subsidiary in Singapore, remained robust in the first quarter. Meanwhile, the LPG operations in Vietnam eased following
consecutive triple-digit growth in the prior quarters.
In line with its strategic priority of growing its Phoenix Super LPG cylinder business, LPG cylinder volume was up 15 percent year-on-year nationwide, with Luzon and Visayasmindanao growing by 53 percent and 11 percent, respectively. Cylinders accounted for almost two-thirds of the business in the first quarter. Meanwhile, sales to the lower margin LPG segments were pulled back, resulting in a 13-percent decline in overall LPG volume.
Domestic volume is now 93 percent of pre-covid levels despite a muted beginning this year with the resurgence of Covid-19 infections and the subsequent community quarantines.
“Our April results, despite the quarantines, exceeded pre-covid levels for the first time. While this is very encouraging, we remain cautious and thus committed to our priorities of providing the best offer to our customers, operational excellence, and accelerating growth,” said Phoenix Petroleum President Henry Albert R. Fadullon.
The oil firm remained the third largest player in market share last year, as per Department of Energy data. Amid the industry contraction, the company’s market share at end-2020 rose to 7.1 percent from 6.9 percent in the first half of last year on the back of the strong recovery of its core business in retail, LPG, and commercial and B2B.
Operational expenses (opex) during the first quarter went down by 16 percent from the prior year and OPEX per liter was down 42 percent. The company’s capital light strategy, which was rolled out prepandemic, proved to yield results.
Among these include the growth in retail network to 676 stations at end-march this year brought about by strategic retail partnerships; rationalization of the lubricants and Familymart supply chain which eliminated warehousing costs and generated savings; spin off of noncore road transport operations to a partnership that led to increased tank truck loadings; and monetizing the brand through an integrated franchising program to offer multiple businesses in one site or outlet, such as the Phoenix Block.
The company’s app-based lifestyle rewards program called Limitless is likewise driving organic growth across its portfolio of fuel and nonfuel retail services including LPG, food, and payments.
Meanwhile, finance costs were down 56 percent during the period on the back of lower average debt levels and average interest rates. The company is strengthening its balance sheet with longer maturities and declining gearing.