Petron income hits on bigger sales

Despite sliding prices last year, the hiked sales volume of Petron Corporation allowed it to gather pace for R3.0- billion consolidated net income last year.

While this was lower than its 2013 income, the oil firm noted that it was still better than its expectation.

It explained that its level of profitability should have been much higher “if not for its inventory loss of R6.5 billion.”

For the Philippine market alone, the sales volume increase was logged at 9.0 percent, according to the oil firm.

That factor, along with the “completion of strategic projects and pro-active risk management cushioned the impact of higher-priced inventory being sold at lower prices in the second half last year.”

On a consolidated basis, the volume rise for the company’s sales along with Malaysia had been at 6.0 percent.

This translated to 86.5 million barrels in sales last year vis-à-vis the 81.7 million barrels in 2013. In turn, this gave the oil firm revenue hike of 4.0 percent to R482.5 billion from the previous year’s R463.6 billion.

Parallel to the dilemmas of all oil industry players, Petron also suffered from the 44 percent plunge in prices last year – hitting $60 per barrel by fourth quarter from a higher base of $108 per barrel in June.

“This extraordinary development had a negative effect on oil companies around the world,” Petron has reiterated, adding that “the same situation happened in 2008 when global oil prices collapsed resulting in a R3.9- billion loss” for the company then.

Despite financial performance snags last year though, Petron president and chief executive officer Ramon S. Ang has noted that the company “rose to the challenge and delivered strong results.”

He added that their focus last year was on “completing major projects to unleash the full potential of our strategic assets and further cement our leadership in the industry.”