Dennis Uy’s Phoenix sells SG unit to raise money

MANILA  -Dennis Uy-led oil company Phoenix Petroleum Philippines Inc. is divesting its shares in a Singapore-based subsidiary to generate additional funds to sustain operations.

In a disclosure on Monday, the listed company said its board of directors approved the divestment of PNX Petroleum Singapore Pte. Ltd. “via share buyback.”

The company did not provide more details. Phoenix Petroleum senior vice president Raymond Zorrilla only said the transaction would be settled in cash as agreed by the parties involved.

“Furthermore, these funds will be used to shore up [Phoenix Petroleum’s] working capital needs, particularly to purchase inventory for its B2B (business-to-business) customers,” Zorrilla said in a message.

A share buyback refers to a transaction when a publicly listed company repurchases its own shares to boost the value of the stocks and improve its financial statements.

PNX Petroleum Singapore was incorporated in 2012 while operations commenced in 2017. As the trading and supply arm of Phoenix Petroleum, it facilitates the latter’s internal fuel requirements.

“The office trades and supplies a wide range of refined products to serve all kinds of customers, from retailers to ship-owners, from mining and transport companies to airlines,” the company’s website reads.

READ: Losses of Dennis Uy’s Phoenix surge 3,200% 

In the first semester of 2023, Phoenix Petroleum incurred P24 million in translation adjustment loss related to PNX Petroleum Singapore’s operations, a turnaround from the P308 million gain in the same period last year.

As such, the company recorded a net loss attributable to the parent company of P2.07 billion compared to a P120.8-million net loss previously.

Revenues slumped by 64 percent to P27.6 billion during the reference period mainly because of the decrease in total volume sold.

As the cost of sales and services declined by 65 percent to P25.6 billion, selling and administrative expenses decreased by 8 percent to P2.6 billion due to lower delivery costs.

Moving forward, the oil firm said it would continue exercising risk management measures to reduce the impact caused by developments in the global market, specifically Russia’s invasion of Ukraine and the pandemic.

It expects the measures being undertaken to improve operations “would start to churn in positive results of operations, as additional funds are raised and access to working capital is restored.”

“In addition, there are ongoing initiatives that will reduce the working capital requirement for the company … by actively managing inventories and optimizing volume to maximize sales and profitability,” it added. INQ