Premium products, belt tightening shore up Shell Pilipinas profit
Shell Philippines | PHOTO: Official website of Shell Philippines Corporation / pilipinas.shell.com.ph
MANILA, Philippines — Despite posting lower sales, oil giant Shell Pilipinas Corp. (SPC) grew its net income by almost 6 percent to P1.25 billion in 2024 on lower expenses coupled with higher demand for premium products.
The company said in a disclosure to the Philippine Stock Exchange that net sales had totaled P243.57 billion in 2024, down by 3.8 percent.
However, SPC’s costs and expenses dropped by 4.3 percent to P237.5 billion, attributed to supply efficiencies, structural cost reduction and interest avoidance.
“This improved performance was fueled by significant operational efficiencies, including P900 million in operating expense savings—higher by almost half a billion pesos versus the target,” SPC said.
The company said increased demand for premium products across key segments enabled it to grow its margin even as overall sales volumes dipped by 3 percent.
“Our solid performance in 2024 demonstrates our capability to consistently deliver value through strategic management and operational excellence,” SPC president and CEO Lorelie Quiambao-Osial said.
“We remain dedicated to strengthening our cash position, driving revenue and earnings growth and expanding our volume across key markets. Through innovative strategies and disciplined financial management, Shell Pilipinas will remain competitive and resilient in a dynamic and fast-paced market environment,” she added.
Cash flow
Core earnings rose by 15 percent to P2.6 billion, while cash flow from operations totaled P7.2 billion. Excluding adjustment in working capital, cash flow stood at P10.1 billion.
“Free cash flow improved year-on-year but remained in deficit at P1.6 billion, driven primarily by higher working capital and inventory holding impact,” it added.
SPC’s non-fuel retail segment grew by 13 percent, driven by lubricants and vehicle servicing, along with convenience retail.
The firm said its mobility business “maintained robust customer engagement” following the relaunch of Shell Fuel Save and strong marketing use of Shell GO+.
Its non-fuel retail segment grew by 13 percent, driven by lubricants and vehicle servicing along with convenience retail.
Commercial fuels volume rose by 3 percent on the back of stable performance in mining, power and manufacturing sectors, along with new customers from other sectors.
Meanwhile, sales volumes of lubricants climbed by 10 percent because of higher premium penetration, new customers and regained accounts.
