MANILA, Philippines — Amid external headwinds, listed oil giant Shell Pilipinas Corp. rebounded as net income reached P1.4 billion in the three months ending March following a net loss of P310.2 million in the same period a year earlier.
“We are making strategic choices to strengthen our market position, boost business resilience, and drive financial strength. We will win every day and win together with our motivated workforce, business partners, and the best retailer network in the country,” Shell Pilipinas President and CEO Lorelie Quiambao-Osial.
The company reported net sales of P60 billion, down by 8.2 percent because of “lower marketing volumes.”
Gross profit surged by 37 percent to P6.1 billion mainly because of inventory holding gains with the uptrend in global fuel prices.
During the quarter, Shell Pilipinas said its “focused approach to cost management contributed to its solid core earnings performance.”
Shell Pilipinas sold 941.2 million liters of fuel, a decrease of 10.8 percent while marketing volumes dropped by 10.7 percent to 932 million liters.
Decreased spending on repair, maintenance
Cost of sales also declined by 11.5 percent to P53.8 billion while selling, general, and administrative expenses slid by 12.5 percent to P3.7 billion.
Lower expenses, the firm said, are mainly attributed “to the targeted decreased spending on repair and maintenance cost, outside services, logistics, and transshipment and advertising and promotions.”
Shell Pilipinas also said its free cash flow “significantly improved” from negative P5.9 billion to positive P2.2 billion because of its active working capital management and value delivery on investments.
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“As we evolve in an increasingly competitive industry, Shell Pilipinas remains steadfast in delivering value to our shareholders fueled by our refreshed strategy, strong focus on performance, and disciplined delivery,” Osial added.
Shell Pilipinas said earlier it earmarked a capital expenditure of P2 billion to P3 billion to enhance the efficiency of its terminals and expand its mobility footprint mainly comprised of fuel stations.
Import terminals’ upgrade
Shell Pilipinas vice president for finance Reynaldo Abilo said half of the entire budget “will be dedicated [to] improving the asset integrity and the efficiency of our terminals across the country,” specifically its main import facility in Batangas province.
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He also said the other half will be used to open more mobility stations by adding about 20-25 more this year.
As of end-2023, the oil company has 1,179 mobility stations in the archipelago.
Osial said the company’s fifth terminal “is underway,” adding, “We are on track when it comes to the planned medium-range capable [import] terminals.”
At present, Shell Pilipinas has four import facilities in Tabangao in Batangas City, Cagayan de Oro City, Subic town in Zambales province, and Santa Cruz town in Davao del Sur province.