Petron H1 bottom line dips by 93%

Petron Corp., the country’s biggest oil refiner and retailer, said its consolidated net income plunged by 93 percent in the first half of the year to P432 million from P6 billion a year ago.

In a statement, Petron said the sharp decline in profit was due to the P500-million loss posted by its Philippine operations in the second quarter and the consolidation of its Malaysian operations, which resulted in another P1.6-billion loss. The substantial margin contraction of both operations was due to the volatility of the global oil market.

With the consolidation of the Malaysian operations already considered, consolidated revenue rose by 43 percent to P193.3 billion from P134.9 billion a year ago.

Excluding Petron Malaysia, Petron Philippines posted a net income of P1.99 billion in the first half.

“The industry saw a steep and continuous decline in crude oil and finished product prices from April to the first week of July. In the Philippines, this led to 13 weeks of consecutive price rollbacks in local pump prices totaling P10.50 per liter for gasoline and nearly P9 per liter for diesel,” the company said. It added that margins narrowed as higher-cost inventory was sold at lower prices. The drop in prices was caused by the eurozone crisis and the slowdown in the economies of the United States and China.

While margins were contracting, Petron’s total domestic sales in the Philippines grew by 9 percent in the first half of 2012 to 21.81 million barrels.