Petron sees P18B net profit
DESPITE the slump in oil prices, the country’s leading oil distributor and refiner Petron Corp. expects to post a banner year this 2016, with net profit seen reaching P18 billion as its upgraded Bataan refinery reaches optimal operation.
Ramon S. Ang, president of both Petron Corp. and its parent conglomerate San Miguel Corp. (SMC), told reporters late Wednesday that the Bataan refinery had now become very efficient in its fuel extraction, with output now reaching 180,000 barrels a day. “That means it has achieved maximum liquid yield and even for petrochemical products, this has been achieved,” Ang said shortly before the investors briefing for SMC’s P30-billion preferred shares offering late Wednesday.
“Can you imagine that at $30 per barrel, we will be tracking $650 million in cash flow? And this year, 2016, I think Petron will give us P18 billion net income (even with global oil prices) at $30 per barrel,” Ang later on said during the open forum.
In the first nine months of 2015, Petron posted P4.46 billion in net profit attributable to equity holders of parent firm compared to P3.32 billion in the same period a year ago.
In 2014, Petron chalked up a full-year attributable net profit of P3.32 billion compared to P5.25 billion in 2013.
Petron has spent $2 billion upgrading the Bataan refinery and shelled out another $700 million to put up a power plant to supply electricity to Petron and supply another 600 tons per hour of steam.
When Petron started the refinery upgrade a few years back, Ang said global oil price averaged at $100 per barrel, which in turn was projected give Petron $1 billion in free cash flow each year once the project was completed.
But even now that oil prices had gone down to about $30 per barrel, Ang said cash flow based on earnings before interest taxes, depreciation and amortization (EBITDA) could still reach $650 million this year because of the increase in economic yield following the successful refinery upgrading program.
“When we were expanding the refinery, the liquid yield or economic yield of the refinery was much lower then at around 60-plus percent. Right after we have expanded the refinery, we are now experiencing a tremendous growth in the extraction of white product, meaning for every barrel, we are now able to extract 93 percent economic liquid yield of gasoline or diesel. So we are quite lucky that the technology we have chosen in the upgrading of the refinery in the Philippines was really really very successful,” Ang said.
