MANILA, Philippines - Petron Corp., the country’s leading oil firm, posted a net income of P1.1 billion in the first half of 2013, a six-field increase from P183 million in the same period last year.
In a statement, the company attributed the earnings surge to a 22 percent rise in sales volume at 39.8 million barrels from 32.5 million barrels in 2012. This was due to the full consolidation of its Malaysian operations and the stronger performance of key domestic segments.
With higher sales volumes, Petron posted revenues of P218.8 billion in the first six months of 2013, up 13 percent over the same period last year.
The company earlier admitted that the second quarter was challenging given the sudden drop in commodity prices during the period.
Similar to other downstream oil companies in the region, Petron experienced depressed margins owing to the substantial decline in Dubai crude prices which averaged $108 per barrel in the first quarter versus $101 per barrel in the second quarter. This caused local fuel prices to fall sharply against higher costing inventory.
Petron also had a planned maintenance shutdown during the second quarter and had to import higher-costing finished products.
Despite difficult times, Petron maintained its lead in the oil industry with a 38 percent share of the total market as of March 2013, driven mainly by its retail sales.
Petron has likewise been consistently delivering volumes despite aggressive competition through the expansion of its retail network in the Philippines which now number over 2,100 service stations – larger than its two biggest competitors combined.
“Even as the short-term business outlook for the oil industry remains volatile, Petron focused on completing major projects aimed at boosting profitability over the long-term,†Petron chairman and CEO Ramon Ang said.
He said they are now set to complete their biggest investment in their 80-year history – the $2-billion Refinery Masterplan Phase 2 (RMP-2) at its 180,000 barrel-per-day Bataan refinery.
He said the project, which is about 80 percent complete, would substantially improve margins as it eliminates the production of low value fuel oil, converting it to high-value gasoline, diesel, and petrochemicals instead.
The Petron chief said this would give the flexibility to refine crude from a variety of sources, thus enhancing the country’s supply security. RMP-2 will make Petron the only oil company capable of locally producing fuels that meet the more stringent and environment-friendly Euro-4 standard.
In Malaysia, Petron continues to upgrade and convert the service stations to the Petron brand and image. Nearly 200 out of 560 stations have been converted featuring improved facilities and personalized services.
“With the programs in place and in the pipeline, Petron is in a unique position to benefit from the robust economic growth being experienced in the Philippines and Malaysia,†Ang said.