In an interview, Caltex country chairman Nick Florio said they have to revise their earnings projection to reflect the real situation in the market.
"Consumption is down, margins are below expectation and sales are down. The level of profitability in the industry is also below expectation," he said.
For the first nine months of 2001, he said Caltex recorded an income of only P200 million.
But Florio said the nine-month income was a turnaround compared to a net loss of P500 million incurred in the same period in 2000. "It’s an improvement compared to losses due to some economic pressures last year. However, it is still out of our target expectations," Florio said, describing the January to September 2001 earnings.
This income level, he said, also prompted them to review and adjust their earnings projection for the whole year of 2001.
Two months ago, Florio said they had revised their P1 billion target earnings to P800 million and recently, downscaled it further to roughly P500 million to P600 million.
He said to keep up with the new income target, they have implemented some measures to cut expenditures. "We have to be prudent on our expenses," he said, adding they plan to spend $50 million for capital expenditures next year, the same capex level of this year. "It (capex) stays," he said.
At present, Caltex has more than 870 service stations all over the country. Of this, only 54 stations have Star Mart convenience stores.
Unlike last year, the oil majors – Caltex, Petron Corp. and Pilipinas Shell Petroleum Corp. – are expected to slowly recover.
The so-called Big "3" claimed they will improve their gross margins this year due to enhanced marketing strategies.