Petron incurs P14.2-B net loss in H1

PETRON Corp. incurred a consolidated net loss of P14.2 billion in the first half of 2020, reversing the P2.6 billion net income it posted in the same period a year ago.

In a disclosure on Tuesday, the listed oil company blamed the net loss on the “combined slump in demand, poor refining margins and collapse in prices” and reported that its consolidated revenues fell by 40 percent to P152.4 billion from P254.8 billion.

Consolidated sales volume from its Philippine and Malaysian operations decreased by 19 percent to 41.9 million barrels from 51.9 million amid a sharp decline in fuel demand because of the impact of the coronavirus disease 2019 (Covid-19) pandemic.

Local sales volume declined by 28 percent because of reduced consumption, particularly in aviation and retail, with the implementation of stricter quarantine measures in the country to contain the coronavirus’ spread.

“The worldwide lockdowns resulted in an unprecedented demand destruction, which led to a sustained drop in oil prices, reaching record low levels in 26 years,” Petron said.

Dubai crude plunged by almost 70 percent or $44 per barrel from January to April, when oil prices fell to as low as $13 barrel in daily trading.

“As oil consumption declined, refining margins also remained weak in the region,” the firm said.

During the period, Petron suffered inventory losses of nearly P15 billion.

“We continue to improve our productivity and reduce our expenses to help the company cope with Covid-19’s impact. At the same time, we have initiated cash preservation initiatives and prudently manage our capex (capital expenditure),” Petron President and Chief Executive Officer Ramon Ang said in the disclosure.

Petron projects “modest gains” from an inventory of about P3.5 billion in the second half as prices start to recover, he added.

“As the economy slowly reopens, we will need to find new ways to adapt to these new and unprecedented economic realities and remain resilient. Just as we have survived many hardships in the past, we know we can rely on our strong corporate culture to pull us through this most challenging period,” Ang said.

Petron shares inched up by 4 centavos or 1.32 percent to close at P3.06 each on Tuesday.