Petron earnings down 25% as margins narrow

Leading oil firm Petron Corp. of billionaire Ramon S. Ang suffered a 25-percent drop in its bottom line in the first nine months due to crude market turbulence that gnawed on operating margins.

The company reported on Tuesday that its net income in the January to September period had reached P7.1 billion, down from P9.5 billion a year ago.

Petron’s operating income likewise plunged to P22.3 billion from P27 billion.

READ: Petron raises P16.8B from sale of preferred shares

“The strong performance of the company’s marketing segment was weighed down by the correction in refining margins … [R]egional refining cracks tracked the continued correction in crude prices to pre-war levels affecting the margins of Petron,” it said in a statement.

According to the group, the global oil market continued to show uncertainties due to weak demand from economic powerhouse China, which worsens the impact from the ongoing war in the Middle East.

Article continues after this advertisement

It said the price of benchmark Dubai crude had continued to fall in the third quarter, settling at $74 per barrel, down to 17 percent from its $89 per barrel peak in April this year. Despite the current “challenging business environment,” Ang remained optimistic about the firm’s growth prospects.

“Our resilience, while repeatedly tested, continues to carry us through challenging market dynamics. We are grateful for the steady support of our customers and other stakeholders, allowing us to still deliver growth despite temporary setbacks,” he said. Petron’s consolidated revenues hit P657.93 billion in the period, a 12-percent jump from the P587.28 billion generated last year. The improvement in the top line was buoyed by the company’s sustained volume growth since the start of the year, which reached 104.4 million barrels from 93.6 million. Sales volume from its Philippine operations and Singapore trading arm posted a combined 16 percent increase to 67.8 million barrels, while sales volume from Malaysian subsidiaries inched up 4 percent to 36.6 million barrels. The country’s only oil refiner supplies about 40 percent of the total fuel requirements nationwide through the refinery in Bataan. In September, the listed firm said its latest preferred share offering had been well-received by investors, allowing it to raise P16.83 billion. —Lisbet K. Esmael