Export sales double Petron’s 9-month earnings to P4.78B

Buoyed by robust export sales, publicly-listed Petron Corp. reported a net income of P4.78 billion for the first nine months of 2005, double the P2.36 billion earnings posted in the same period in 2004.

In a disclosure to the Philippine Stock Exchange (PSE), Petron, a market leader and partly-owned by the government, also posted a net profit of P2.47 billion in the third quarter, a substantial P1 billion increase from a year earlier.

In the third quarter alone, export sales contributed P848 million or 34 percent of the company’s income during the period.

In the first nine months of the year, export income contribution totaled P1.62 billion or more than a third of the company’s net income. Export volumes also increased by 27 percent to 4.74 million barrels compared to 3.72 million barrels over the same period in 2004.

"Our deliberate strategy to place at least 10 percent of our sales volumes abroad continues to significantly contribute to our bottom- line while increasing our presence in the regional market," Petron president and CEO Khalid D. Al-Faddagh said.

"We are also seeing improved refinery margins due to favorable regional prices and sound strategic investments in our refinery. These include the mixed xylene plant as well as the $100 million isomerization unit and gasoil hydrotreater that we commissioned last May," Al-Faddagh said.

For the next three years, Petron has earmarked $300 million for additional refinery units, allowing it to expand mixed xylene capacity and extract new petrochemical streams such as benzene, toluene, and propylene

The investment will likewise optimize refinery operations through higher white product yields. The units are expected to go onstream by early 2008.

Petron chairman Nicasio I. Alcantara, for his part, said they expect the company to benefit from its diversification efforts.

"We see unique opportunities for Petron to sustain its growth by diversifying into the petrochemicals business. This will ensure our growth and profitability in the long-term as petrochemical demand outpaces global GDP (gross domestic product) over the next five to 10 years," Alcantara said.

Petrochemicals command better regional prices and are used in various industries including the production of plastics, textiles, pharmaceuticals, food packaging and adhesives, among others.

Petron’s total sales for the first three quarters of 2005 amounted to P138.43 billion, up by 32 percent compared to 2004.

Due to sluggish local demand attributed to rising oil prices, total sales volume decreased by two percent to 38.35 million barrels.

Despite this, Petron continued to dominate the market – increasing its overall market share to 38.2 percent as of August 2005.

In the highly competitive retail market, the company remains the market leader with a 34.1 percent share.

The company’s robust performance in retail underscores stronger customer preference for the Petron brand due to its world-class quality products and superior service.

Petron has added 42 more outlets to its retail network since the start of the year. Its service station count of 1,246 remains the largest in the country.