MANILA, Philippines - Top oil refiner Petron Corp. maintained its corporate credit of PRS Aaa the highest on Philippine Rating Services Corp.’s scale – for its overall capacity to service its maturing obligations within a period of one year.
A company given a rating of PRS Aaa has a very strong capacity to meet its financial commitments relative to that of other Philippine corporates.
In issuing the rating, PhilRatings considered Petron’s robust profit growth; ample liquidity and financial flexibility; strong brand equity and market leadership; synergies with the parent company; and significant funding requirements.
Petron retained its leadership position in the industry, cornering a 37.8-percent market share in 2010. This was mainly driven by the company’s aggressive retail network expansion, introduction of new products and the launch of nationwide sales promotions.
Last year, it posted a net profit growth of 86.05 percent to P7.92 billion while sales revenues climbed 17 percent to P134.9 billion. In the first half of 2011, Petron’s net earnings grew more than two-fold to P6.05 billion on the back of higher oil prices and increased export sales.
Cash flows from operations amounted to P17.45 billion given the company’s strong EBITDA and lower level of trade receivables. This provided more than enough coverage for the company’s maturing debt amounting to P11.52 billion.
“While cash flows from operations were lower in 2011 as a result of the increase in inventory levels and higher oil prices, Petron’s cash and cash equivalents amounting to P22.55 billion was adequate to pay off P11 billion in current portion of long-term debt. The company’s maturing debt included the rated P6.3 billion fixed-rate corporate notes which were settled upon maturity last Aug. 3, 2011,” PhilRatings said.