Pryce Corp hits 2017 profit target

Pryce Corp. has set a higher income target of P1.55 billion this year after hitting its profit guidance last year on the back of strong liquefied petroleum gas (LPG) sales.

In a statement yesterday, the company said it registered a 29 percent jump in net income from P966.09 million to P1.248 billion last year, which is within the P1.25-billion expectation for the year.

The rise in earnings was hinged on the 37 percent increase in consolidated revenues from P6.72 billion to P9.23 billion, mainly on LPG sales.

It said sales of LPG, along with cylinders and accessories, stood at P8.66 billion or 94 percent of total revenues.

The firm said LPG sales volume grew modestly at 11 percent from 189,000 metric tons (MT) to 210,000 MT, boosted by higher LPG contract prices (CP) from an average $346 per MT in 2016 to $491 per MT last year.

Pryce said the volume growth was attributed to the strong performance 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 percent year-onyear volume growth as compared to about four percent volume growth in Luzon.

Meanwhile, industrial gas sales contributed to about four percent of the total revenues at P391.5 million and real estate sales and sales of pharmaceutical products accounted for the balance.

For this year, Pryce sees its net income to grow by around 20 percent and sales volume to rise as much as 15 percent, setting a target income of P1.55 billion.

The company said the projection is based on the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law and its expansion projects.

“(Pryce) perceives the passage of the TRAIN Law (RA 10963) as having a positive impact on the LPG industry, as the law imposes relatively lower taxes on LPG as opposed to other fuels. This is seen to make market preferences gravitate gradually towards LPG over the other fuels in the next two to five years,” it said.

For its expansion program, Pryce said it would continue its expansion projects started about two years ago, which aim to increase the storage capacities of its marine terminals and to bring its product closer to the markets.

All its seven VisMin import terminals will be expanded to enable each one to accommodate at least one shipload of 2,500-MT cargo.

These include the expansion of its terminals in Albuera, Leyte and Sta. Cruz, Davao del Sur – which was completed in 2017, and the expansion of the LPG terminals in Sogod, Cebu and Balingasag, Misamis Oriental which will be completed by July or August this year.

“The ability to discharge one shipload in a single terminal will reduce (Pryce)’s import costs by $10 to $20 per MT,” Pryce said.

The company is also eyeing to build at least 15 refilling plants in the VisMin areas to make its products closer to consumers.

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