Shell net income doubles to P5.7B last year

Pilipinas Shell Petroleum Corp. posted a P5.7-billion net income in 2005, double the previous year’s P2.98 billion, a top company official said.

Pilipinas Shell country chairman Edgar O. Chua attributed the dramatic improvement in the oil firm’s financial performance to a solid marketing thrust, perked up by positive refining margins.

Chua said the company was also able to jack up revenues from exports, coupled with increased sales of various lubricants and the higher revenues generated from convenience stores, which are normally lumped as added feature of gasoline service stations.

"After many years of delivering returns which are below market performance, 2005 saw a return on equity (appraisal basis) of 10.3 percent with our P5.7-billion net income," Chua said.

At the onset of the deregulation of the oil industry in 1998 and until 2005, the company’s return on equity was estimated at a modest average of 3.7 percent.

Chua, however, said they hope that last year’s financial turnaround could serve as an indication that Shell’s Philippine operations can deliver fair and reasonable returns to its shareholders on a sustained basis.

"This could also strengthen Shell’s confidence in further investments in the downstream Philippine oil industry, where it has been an active player since 1914," the official said.

Chua also confirmed that the company will continue its refining operations in the Philippines. For the past years, Shell has been conducting thorough studies of its overall business prospects in the country.

The Shell executive said the company continues to expand its presence in refining, supply, distribution and marketing in the sprawling chain of the local oil market.

"Shell’s thrust is to continue to provide the highest quality products and services to all its customers on a long- term basis," Chua said.

"It is also our objective to be a major contributor to nation building not only through the investments in the business but also in developing our Filipino staff where we have over 70 Filipino managers working across the world, and through the various programs that protect the environment as well as develop the capability of our less fortunate countrymen" he added.

Shell has also been involved in providing scholarships to out-of -school youths, livelihood training to communities, either through the Pilipinas Shell Foundation or in partnership with non-governmental organizations such as the Philippine Business for Social Progress (PBSP), Bantay Kalikasan, Philippine Eagle Foundation, Philippine Business for Environment and Gawad Kalinga.