Petron Corp., the country’s largest oil refiner, reported yesterday a net income of P4.1 billion in the first three quarters of 2007, a slight increase from the P3.99 billion earnings in the same period in 2006.
In a disclosure to the Philippine Stock Exchange, Petron also said its third quarter income increased 7.3 percent to P1.4 billion against the P1.3 billion posted in the third quarter of 2006.
The company attributed increase in earnings to foreign exchange gains and significantly improved margins on export sales.
Pre-tax income rose 19 percent to P6.04 billion, more than offsetting an increase in income tax expense due to the expiration of the income tax holiday on mixed xylene sales.
Petron posted a two percent increase in domestic sales to 31.36 million barrels, primarily due to higher sales of LPG as well as increased fuel sales to the power sector.
In the highly-competitive retail sec-tor, the company’s sales volume likewise increased, sustaining its market leadership.
Based on the latest industry data, Petron is serving 38.4 percent of the country’s total fuel requirements.
Exports continued to provide steady income. Export margins more than doubled, contributing about 25 percent of total net income despite a decline of around 17 percent in volume compared to last year.
The lower export volume was a result of the retirement of the company’s old cracking unit to enable the early completion of the new one — the petro fluidized catalytic cracker (PetroFCC). The decline in exports pulled total revenues down seven percent to P152.33 billion from P164.2 billion in 2006.
“We are encouraged by the consistent profitability of our export business, and we expect that with the increase in our petrochemical production starting next year, Petron’s earnings growth will move to a higher trajectory,” Petron chairman and CEO Nicasio I. Alcantara said.
The PetroFCC will improve operating efficiencies at Petron’s 180,000 barrel-per-day Bataan refinery and enable increased production of white products as well as the extraction of the petrochemical propylene.
PetroFCC is a major component of the company’s $300-million refinery master plan. The plan likewise includes a BTX unit that will produce aromatics such as benzene and toluene and expand the company’s mixed xylene production.
The construction of the PetroFCC is expected to be completed by the end of 2007.
Meanwhile, Petron continues to expand its service station network. As of end-September, the company had opened 25 additional service stations, bringing its total service station count to 1,267 — the largest retail network in the country.
“While we continue to pursue our diversification strategies, our business remains anchored on the domestic market,” Petron president Kamal M. Al-Yahya said.
“This is why we continue to invest not only in network expansion, but also in product development and supply chain improvements.
These initiatives should ensure that we sustain our market leadership over the long term,” he added.