Higher sales volume for Petron Corp. failed to make up for the impact of lower oil prices as the company suffered an 88-percent drop in income for the first three months of the year.
The country’s top oil firm reported a net income of just P257 million in the first quarter of 2015 from P2.2 billion in the same period of 2014.
The benchmark Dubai crude averaged $52 a barrel in the first quarter against $104 a barrel in the comparative period of 2014.
Noting the lingering weakness in international oil prices, Petron said its bottom line would have been much higher if not for an inventory loss of about P3 billion.
Revenue likewise decreased by 31 percent to P86.7 billion, reflecting the drop in oil prices.
Despite the income drop, Petron president and CEO Ramon S. Ang remained optimistic that efforts to further increase sales would pay off in the long run.
While the drop in oil prices had put pressure on the company’s margins, he said, a disciplined approach to risk management moderated its impact and would continue to benefit the company over time.
“We fully understand that long-term growth will always be disrupted by short-term instability, and our investments will enable us to grow, even thrive in this challenging business environment,” Ang said.
The refinery upgrade that is expected to be fully commissioned in the next few months will help stabilize margins despite volatility in crude prices, he said.
The sales growth in the first quarter of the year is anchored on Petron’s retail expansion program and maximizing sales in its existing network.
The company has an additional 300 service stations in the pipeline over its current 2,800 branches in the Philippines and Malaysia.