Shell swings to P3.4 billion income in January-September

MANILA, Philippines — Pilipinas Shell Petroleum Corp. (PSPC) reported a net income of P3.4 billion from January to September this year, a turnaround from the P13.9 billion net loss in the same period last year.

In a disclosure to the Philippine Stock Exchange yesterday, the company said it posted a strong recovery  despite the mobility slowdown resulting from the two-week Enhanced Community Quarantine (ECQ) implemented in Metro Manila and select provinces last August, and the succeeding Alert Level 4 restriction.

“Our renewed strategy has been proven effective for our business to thrive amidst the resurgence of selected lockdowns in the country. We are continuously growing our capacity for the remainder of 2021, to prepare for the near and medium-term demand pick-up as active new COVID cases decline, vaccination programs accelerate, and travel restrictions ease,” PSPC outgoing president and CEO Cesar Romero said in a statement.

PSPC said that while its marketing volume delivery declined by six percent year-on-year due to increased lockdowns, it was able to sustain its value delivery through its successful marketing programs and premium product offerings across businesses.

The oil firm’s  premium fuel penetration increased to 31 percent, with Shell’s V-Power brand maintaining its position as the most preferred fuel brand in the country.

Meanwhile, its commercial fuels and bitumen continue to be the preferred supplier of key construction sector players.

In particular, the firm’s eco-friendly product, Shell Bitumen Freshair, is used in big ticket projects like the P30-billion Cebu-Cordova Link Expressway, an 8.5-kilometer toll road project that includes a bridge connecting Cebu City to Mactan Island through the town of Cordova.

On the other hand, PSPC said its lubricants business continued to thrive in both value and volume, rising  by 36 percent on the back of premium products growth and deeper consumer penetration nationwide.

The company’s aviation volumes also continued to improve, with volume recovery in the third quarter of over 60 percent compared to the same period last year, driven by an increase in passenger flights as domestic and international flight restrictions ease.

In terms of network expansion, PSPC had already spent 68 percent of its P2.2 billion capital expenditure program to put up new stations while the rest was used for supply chain maintenance and upgrades, in preparation for demand resurgence.

As of end-September, it opened 25 new mobility sites under its fuel retail network. It also opened 156 Shell Select stores, 219 Select Express, 72 Deli2Gos, and 424 Lube bays, which pushed non-fuel retail operating profit up by 28 percent.

PSPC’s borrowing levels remain controlled, while working capital requirements increased as global market prices for gasoline and diesel increased by 50 percent from December 2020.