Petron incurs P1.1-B loss for 2000

Publicly listed Petron Corp. reported yesterday a net loss of P1.1 billion for 2000, lower than the projected P2-billion loss for the period, but marked a complete turnaround from the P2.4-billion net income registered in 1999.

Petron said this was a record loss for the company, and marked only the second time in its history that it turned in a negative performance. The first was in 1997 when the company ended up in the red by P500 million due to foreign exchange losses following the Asian financial crisis at that time.

The company blamed the peso depreciation and volatility of crude oil prices in the world market for its huge losses last year. Petron said its financial performance started to deteriorate in 1999 when its net income dropped by 35 percent to P2.4 billion from P3.7 billion in 1998, as domestic prices of refined products failed to catch up with higher crude oil prices.

It said the company continued to sustain significant cost under-recoveries through most of 2000. Specifically, it incurred under-recoveries based on benchmark Dubai Crude Oil of P0.38, P1.10, and P1 for the months of October, November and December 2000, respectively.

Aside from these, the company also incurred other under-recoveries of P0.17 per liter in operating cost; P0.18 per liter in interest expense; and P0.56 per liter in foreign exchange losses last year.

Petron’s losses in 2000, though, were slightly mitigated by income from its subsidiaries bringing its consolidated net loss down to P1 billion.

Petron is optimistic that it will have a healthier outlook for 2001, seeing more stability in the foreign exchange market.

Petron also hopes to see deregulation work as a sound public policy, enabling the local market to reflect global trends in oil prices and establishing a consistent framework for future investments in the industry.

"We have always perceived that out financial difficulties were temporary," Petron chairman Jose Syjuco Jr. said. "We trust that the economic situation will allow us to turn in a more favorable performance for 2001."