Petron net profit down 12% despite 50% jump in revenues

Petron Corp., the country’s biggest oil refiner and retailer, posted a 12-percent decline in its consolidated net income to P2.2 billion in the first quarter this year from P2.5 billion a year ago due mainly to lower margins.

This was despite a 50-percent surge in revenues to P112 billion during the quarter from P74.7 billion in 2012, the company said in a disclosure to the Philippine Stock Exchange Monday.

Petron explained that its revenues were boosted by the consolidation of Petron Malaysia starting in the second quarter of last year. This accounted for the 66-percent increase in the company’s total sales volume to 20 million barrels in the first quarter of 2013 from only 12 million barrels a year ago.

Earnings, however, fell “due to lower margins as reference prices for both crude oil and finished products dropped during the current period, causing a drastic drop in retail prices against higher costing inventory.”

According to Petron, Dubai crude averaged only $108.19 a barrel in the first three months of 2013 compared to $116.45 last year.

In the Philippines, Petron said it continued to enhance its leadership position by posting a 7-percent sales volume growth in the strategic but highly competitive retail sector. This growth was driven largely by the company’s network expansion program, which increased the company’s presence in underserved areas.

The oil firm operates the biggest network in the industry with 2,070 service stations—bigger than its two closest competitors combined, thus allowing Petron to sustain its leadership with a market share of more than 38 percent.

In Malaysia, Petron has converted 125 of the 550 service stations to the Petron brand. The rebranded stations feature improved facilities and personalized services. The re-branding program is expected to be completed by 2014.

“Petron is in a period of unprecedented growth and expansion. The projects we set out to do a few years ago are nearing completion and with it, the prospects of a better future for both the company and the country,” said Petron chair and CEO Ramon S. Ang.