Petron records net income of ₧3.87B in January-june

Petron Corp. ended the first semester with a net income of P3.87 billion, a turnaround from the P14.24-billion net loss it incurred a year ago, due to the rebound in oil demand.

Of the amount, P2.14 billion was registered in the second quarter.

Oil prices steadily rose in the first semester with Dubai crude averaging $72 per barrel in June, up 44 percent from its December 2020 level. The bullish market was driven by the conservative stance of major oil producers in supply management, boosted by optimistic market sentiments with the global vaccination rollouts and gradual reopening of economies, Petron said in a statement.

With the continued recovery in

prices, consolidated revenues of Petron’s Philippine and Malaysian operations went up 14 percent to P174.13 billion from last year’s P152.36 billion despite lower sales volume.

Sales volume was 7 percent lower versus the same period last year as the market continues to reel from the impact of the pandemic. however, the slowdown in sales to industrial accounts was partially offset by the gradual improvement in the retail segment. Local sales in the service stations climbed by about 12 percent while volumes for lubes significantly improved by nearly 50 percent.

Petron’s operating income reached P8.95 billion, a reversal from the P14.54-billion loss it recorded a year ago.

The country’s remaining refining company also cited petrochemical prices and savings on operating expenses and financing costs as factors that led to its rebound.

“Though we continue to face some challenges, we have seen tremendous progress this year. The increase in demand and continued improvement in international prices indicate that we are slowly but surely regaining lost ground as an industry,” said Petron President and CEO Ramon Ang.

he hopes the company will be able to sustain its improved performance as refinery operations resumed last June 1.

“Our financial performance in Petron, due in no small part to our recovery efforts and prudent use of resources, is proving to be a complete turnaround from last year which we hope to sustain as we continue to move past the pandemic slump,” said Ang.

Petron temporarily closed down its 180,000-barrels per day refinery in May 2020 and reopened in October. It again ceased refinery operations last February 10.

Following its approval as a registered-enterprise last December, the Petron Bataan Refinery has started to transition into AFAB (Authority of the Freeport Area of Bataan) and has also begun to avail of fiscal incentives from operating in a freeport zone.

Petron has set aside P11 billion for its 2021 capital expenditures (capex), higher than the P8.5 billion it allocated last year. The amount covers its on-going construction of steam generator plants, strategic retail network expansion, and maintenance requirements. Petron has put up 14 new stations in the first quarter with plans to build more for the rest of the year.

This year’s capex will be financed by a combination of internal cash generation and external financing sources.