Strong demand boosts Petron’s 9-mo. earnings

Strong demand for petroleum products along with improved production efficiencies pushed Petron Corp.’s nine-month earnings sharply higher, with its top official predicting that the company’s growth prospects would remain robust.

In a statement, the country’s largest petroleum refiner and distributor said it posted a consolidated net income of P7.4 billion in the first three quarters of 2016, representing a hike of 47 percent from the P5.1 billion it reported in the same period last year.

“Strong demand combined with strategic programs we have successfully executed means a higher growth trend for Petron over the long-term,” Petron president and CEO Ramon Ang said. “We are confident that we can substantially increase our profit in 2016 compared to last year as demand for fuels remains strong.”

The company said that sales volumes of its Philippine and Malaysian operations grew by a combined 6 percent to 78.2 million barrels in the first nine months of the year compared to the 73.6 million sold in the same period 2015.

Both markets saw substantial growth across all major business segments, namely reselling, industrial, liquefied petroleum gas (LPG) and lubricants.

The increase in sales volume partially offset the drop in sales revenue due to lower product prices, the company said, with consolidated revenue decreasing by 11 percent to P247.8 billion in first three quarters of the year versus P278.3 billion in the same period in 2015.

Domestic sales in the Philippines grew by 3.3 million barrels or 10 percent, to 36.4 million boosted by increased industrial diesel sales, retail gasoline volumes, high demand from the aviation sector, and growing LPG consumption from households.

The company also reported that its Malaysian operations continued to exhibit robust growth with an 8 percent increase in its domestic sales over the period.

Operating income grew by 23 percent to P16.8 billion in the first nine months of the year.

Recently, Petron issued and listed P20 billion in fixed rate bonds to retail investors, which was twice oversubscribed over the base offer and was priced at the tight end of the marketing range. Proceeds from the bonds were used mainly to repay existing US dollar-denominated debt.

One major project is the retail network expansion program that enables Petron to increase its market presence. The company has 2,250 service stations nationwide, larger than its three closest competitors combined.

In Malaysia, Petron continues to expand its network, which is now composed of 570 retail outlets, by building more service stations, particularly in underserved markets.

Petron is also producing more high-value fuels and petrochemicals after the commissioning of its $2-billion refinery upgrade project at the start of the year. Costs have likewise gone down since its 180,000 barrels-per-day Bataan refinery—one of the most advanced facilities in the region —can now process cheaper crude oil products.