Petron completes P3.6-B notes issue

Petron said the notes were issued to primary institutional investors with ING Bank N.V. Manila Branch acting as arranger and bookrunner for the transaction.

Petron maintained a corporate credit rating of PRS Aaa – the highest rating on PhilRatings 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 took into account Petron’s robust profit growth; ample liquidity and financial flexibility; strong brand equity and market leadership; synergies with parent company San Miguel Corp.; and significant funding requirements.

Petron maintained 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, Petron 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.

Cashflows from operations amounted to P17.45 billion given the company’s strong earnings and lower level of trade receivables. This provided more than enough coverage for the company’s maturing debt amounting to P11.52 billion.

The considerable funding requirements of the oil company translated to higher loan requirements. Petron’s total debt significantly went up to P86.86 billion in 2010 from only P61.64 billion a year earlier as additional funding was needed for the construction of the refinery solid fuel-fired broiler and the expansion of its service station network.