Petron reports P1.28-B net income in 1st half

Petron Corp., the country’s largest oil refiner, reported yesterday a net income of P1.28 billion for the first half of 2003, slightly higher than the P1.23-billion earnings in the same period last year.

Outgoing Petron president Motassim Al-Ma’ashouq attributed the increase in profits to the 6.8- percent rise in total sales during the period to 25.2 million barrels, from 23.6 million barrels in 2002.

Al-Ma’ashouq, who will assume a senior position in Saudi Aramco but will remain a director of Petron, will be replaced by Khalid Al-Faddagh, a present director of Petron and manager of the facilities planning department of Saudi Aramco.

According to Al-Ma’ashouq, Petron’s sales volumes were boosted by a 48-percent increase in exports to 4.3 million barrels this year from 2.9 million barrels in 2002. About 17 percent of the company’s total sales came from exports.

The company’s total revenues reached P55.3 billion as of June 2003, up by 31.7 percent from P42 billion last year.

"We pursued profitable export opportunities to augment local marketing efforts and were successful in developing a niche in the international markets," Al-Ma’ashouq said. "We continue to apply significant cost discipline in our business resulting in savings for the company. Simply put, Petron is doing more with less."

The improvement in the company’s earnings can also be attributed to its effort to reduce expenses during the period.

Petron’s operating expenses decreased by 5.9 percent to P1.8 billion in the first semester of the year against P1.9 billion in the same period of 2002.

The Petron executive said the company will continue to focus on new markets and initiatives to improve operational efficiency that will create a robust platform to ensure predictability and sustainability of its profits in the future.

He said as part of these initiatives, the company divested of unprofitable service stations and added new ones, bring the total service stations to 1,162 , still the largest network in the country.

As of end-2002, the company’s total outstanding long-term debt amounted to P4-billion and $300-million short-term loans.

The Petron official said so far, the company has no immediate plans to borrow long-term funds.

Energy Secretary Vincent S. Perez, who seats in the board of Petron as government representative, said there are no plans to divest or increase the government’s shares in the oil company.

"The government is happy with its current (equity) position in Petron. There is no sale down or a buyback of government shares in the company," he said.

The government owns about 34.6 percent in Petron; another 40 percent is owned by Saudi Arabian Oil Co.; and the balance by the public.