Petron brushes off low oil prices; H1 profit up 55%

Petron Corp., the country’s largest integrated oil company, grew its first half net income by 55 percent to P5.3 billion due to a surge in the volume of petroleum products sold during the period.

“Petron continues to deliver strong results amid the prolonged slump in [world] oil prices. This is a direct effect of much improved operational productivity and the expansion of our markets. We are well-positioned to sustain our performance throughout the year,” Petron president and CEO Ramon S. Ang said in a statement.

In a disclosure to the Philippine Stock Exchange on Monday, Petron said the profit growth could be attributed to an aggressive network expansion, improved production and cost efficiencies and a deeper focus on customer programs.

The oil retailer’s consolidated sales volumes in the Philippines and Malaysia rose 9 percent to 51.8 million barrels in the first six months of 2016 compared to the 47.4 million barrels sold in the same period in 2015. The firm said it saw robust growth across its major businesses in retail, industrial, liquefied petroleum gas (LPG) and lubricants sold in both countries.

In the Philippines alone, industrial sales was up by 14 percent given the vigorous growth in the aviation and power generation industries. Petron’s lubricants and LPG businesses also posted an 18 percent and 12 percent increase, respectively, due to higher demand from the transport sector and households.

Petron claimed it has remained the undisputed leader in retail with 2,230 service stations and with hundreds more in various stages of development.

Lower crude oil prices, however, pulled down the company’s consolidated sales revenues in the first semester by 13 percent to P161.9 billion. Despite weaker oil prices and reduced product “cracks” (the difference between the prices of crude oil and finished products), Petron still saw healthy margins sustained by its $2-billion Bataan refinery upgrade. The latter has substantially increased the production of higher value white products and petrochemicals.