Petron profits slide on crude price collapse

MANILA, Philippines - Petron Corp. reported a consolidated income of P3 billion last year, 41 percent lower than the P5.1 billion recorded in 2013 amid the collapse of crude and finished product prices in the second half of 2014, the company said yesterday.

 “This would have been much higher if not for the net inventory loss of P6.5 billion,” the country’s biggest oil refiner said.

In its report, Petron said several factors were able to cushion the impact of the lower prices of gasoline last year.

These are the nine percent increase in Philippine sales volumes, the completion of strategic projects, and pro-active risk-management.

Petron said these factors helped cushion the impact of higher priced inventory being sold at lower prices in the second half of the year.

Oil prices have fallen 44 percent to below $100 per barrel last year amid the global supply glut, data from the company showed.

“The price of benchmark Dubai crude fell by 44 percent from an average of $108 per barrel in June to an average of only $60 per barrel in December. This extraordinary development had a negative effect on oil companies around the world,” Petron said.

In 2008, global crude prices also collapsed, resulting in a P3.9 billion loss for Petron.

In its report, Petron said that combined sales from both its Philippine and Malaysian operations increased six percent to 86.5 million barrels in 2014 versus 81.7 million barrels the previous year.

Thus, sales revenues grew four percent to P482.5 billion in 2014 from P463.6 billion in 2013.

In the Philippines alone, sales grew to 51.5 million barrels as Petron made headway in major market segments namely retail, LPG and lubricants.

By segment, retail volumes surged six percent, the highest growth in the past five years while LPG volumes likewise grew five percent on the back of higher retail and industrial sales.

Petron president and CEO Ramon Ang said the company maintained its position despite the challenging environment.

“Despite a difficult environment, we rose to the challenge and delivered strong results. We focused on completing major projects to unleash the full potential of our strategic assets and further cement our leadership in the industry,” Ang said.

Petron is commissioning its $2-billion Refinery Master Plan Phase 2 (RMP-2) at its 180,000 barrel-per-day Bataan refinery, which would enable the company to locally produce Euro-4 compliant fuels and provide extra volumes to other oil players.

In Malaysia, Petron has nearly 550 stations after it completed 10 new service stations in 2014.

 “The completion of our rebranding and upgrading program is a significant milestone since it lays the foundation for our further expansion in the Malaysian market. We are pleased to note that we are gaining the trust and confidence of consumers there,” Ang said.