Petron still hopeful of recovery amid huge 72% slip in H1 profit

Petron Corp., the country’s largest oil company, is optimistic it will recover in the second half of the year after recording a 72 percent drop in profits in January to June.

In a statement, Petron said it booked a net income of P2.6 billion in the first semester, a significant drop from the P9.5 billion recorded in the same period last year.

The company attributed the drop in first half income to the strong results from Malaysia and extensive savings on fixed costs by the group.

During the period, the industry was affected by the “slump in regional refining margins that penalized Philippine operations by as much as P5 billion,” Petron said.

Consolidated sales revenues fell seven percent to P254.8 billion.

“While Malaysian sales volume grew by four percent and partly offset that of the Philippines, the decrease in Philippine sales reflects decline in volume due to the implementation of the second tranche of the TRAIN Law, which brought total fuel taxes to an average of P6.75 per liter equivalent to over P15 billion excise taxes for the first half,” Petron said.

The company also alleged that such developments encouraged illegal business practices during the period.

Despite the weak first half performance, Petron expects to recover in the second semester.

“These setbacks are just temporary and are all part of the business. We remain optimistic for the second half of the year given signs of modest recovery from gasoline and petrochemical margins recently seen in the market,” said Petron president and CEO Ramon Ang.

Ang earlier said Petron’s Malaysian business is expected to drive the firm’s overall operations on the back of government support and expansion projects.

Through Petron Malaysia Refining & Marketing Berhad, Petron operates the Port Dickson Refinery which produces 88,000 barrels per day. It also owns 11 terminals and storage facilities, and has over 650 stations as of the end of March.

Meanwhile, the company is resuming normal operations at its Bataan Refinery after completing scheduled repair works, including damages incurred during the April 22 earthquake that affected Central Luzon and Metro Manila.

To recall, Petron had advanced its planned one-month maintenance shutdown on its refinery in Limay, Bataan from May 1 towards the end of April following 6.5-magnitude earthquake.

Petron said it decided to proceed with its planned maintenance ahead of schedule as the refinery went on emergency shutdown after the quake occurred.

The last time Petron announced a maintenance shutdown of its refinery was in 2017, when it scheduled a 45-day maintenance shutdown of its refinery as part of its 10-year inspection program.