MANILA, Philippines — Higher oil prices that pushed up fuel costs helped offset declining oil consumption for Petron Corp. in the first quarter, which nonetheless is staying cautious on the recovery path forward.
In a disclosure to the stock exchange on Tuesday, the Ang-led oil refiner reported a net income of P1.73 billion, reversing last year’s P4.9-billion net losses when the impact of lockdowns that started in March last year were first felt.
Related Stories
The latest financial result was also larger than the P1.2 billion in profits from previous quarter.
Since then however, the archipelago has gone back and forth different quarantine levels, which have become looser even under the enhanced community quarantine (ECQ) imposed on Metro Manila, Bulacan, Rizal and Laguna on from March 26 to April 9.
While the return to ECQ appeared to have far less impact on Petron, the oil firm still flagged decreasing sales as a sign that things are yet to go back to normal. More specifically, first-quarter volumes dropped 21% year-on-year to 19.38 million barrels. Consolidated revenues consequently sank a fifth annually to P83.3 billion.
With sales still plummeting, it was not clear from the statement what accounted for the recovery of Petron’s bottom-line. The company did say that it recorded “inventory gains” due to an uptick in global prices, which essentially only means that the value of its oil stockpile have increased due to market forces. That would still have to be sold to be counted as sales.
“Petron is constantly evolving, and we will continue to work towards our goal of emerging stronger from this pandemic,” Ramon Ang, president and chief executive, was quoted as saying in a statement.
“With the country’s vaccination program gaining more ground, we feel confident about our prospects and have, in fact, scheduled the resumption of our refining operations this June,” he said.
Other performance metrics are likewise looking up for Petron. Operating income hit P3.7 billion, nearly a full turnaround from P4.4 billion in operating losses same period a year ago. In March, Petron expressed early optimism for a rebound in economic activity that will drive fuel demand by announcing it will reopen its Batangas refinery in the second half.
With things looking up, Petron has allotted P11 billion in capital investments this year.
Funds will be spent to cover expenses on the ongoing building of Petron’s stream generation plants, opening up new retail branches, as well as the costs of maintenance requirements. In the first quarter alone, Petron has restarted expansion with 14 new stations getting opened and “more for the rest of the year.”
Shares of Petron closed up 2.94% at P3.50 apiece on Tuesday.