Petron sees income tripling to P18 billion this year

[Mike J]

This comes from the industry that claims the high cost of fuel is not their fault. 

MANILA, Philippines — Oil refiner Petron Corp. sees its earnings tripling to P18 billion this year as it hopes to sustain the increase in sales volume on the back of easing mobility restrictions.

Petron president and CEO Ramon Ang said the improved profit would be pumped in by the combined operations in the Philippines and Malaysia.

“Easily, it can reach P18 billion, of which Malaysia (operations) will deliver P12 billion,” he said recently when asked about growth prospects this year for the country’s only remaining oil refiner.

Last year, Petron posted a net income of P6.14 billion, recovering from a net loss of P11.4 billion the previous year.

In the first half of the year, Petron doubled its net income to P7.7 billion from P3.9 billion a year ago. Net sales grew by 129 percent to P398.5 billion from P174.1 billion, driven by the sustained increase in sales volume and prices.

Petron said the benchmark Dubai crude averaged $102 per barrel from January to June as supply concerns persisted due to geopolitical conflicts.

In its first half report, the company said sales volume improved across all trades, with commercial sales posting the highest increase as more industries, including aviation travel, rebounded from the pandemic’s impact.

Among the different segments, the total retail business of the group posted a nearly 30 percent uptick, fueled by the strong sales of its premium gasoline and diesel fuels.

Sale of lubricant products, Jet-A1, liquefied petroleum gas, and petrochemicals likewise showed strong growth compared to the previous year, the company said.

Petron said it benefited from the strong regional refining margins, with higher production at the refinery.

Ang said this came following Petron’s massive $2-billion upgrade at its Bataan refinery, which increased its local production of gasoline, diesel, and petrochemicals.

Petron announced its refinery upgrade in 2018, with the aim of increasing the capacity by 55 percent.

Petron has a combined refining capacity of 268,000 barrels-per-day and produces a full range of world-class fuels and petrochemicals.

It operates about 40 terminals in the region and has around 2,800 service stations where it retails world-class gasoline and diesel.

Asked about selling Petron back to the government or to other buyers, Ang said there are no plans.

Ang noted that while he can easily sell Petron back to the government, even through installment over five years, it would be difficult for the government as it would have to spend billions to subsidize operations because the public transport sector would likely demand for discounts.

[scott h]

It really isnt the refiners fault that their profits are up. As the article says.........

23 minutes ago, Mike J said:

In its first half report, the company said sales volume improved across all trades, with commercial sales posting the highest increase as more industries, including aviation travel, rebounded from the pandemic’s impact.

If sales (demand) is up, so will profits improve, unless a private business is expected to operate at a loss that is 

 

[OnMyWay]

3 hours ago, Mike J said:

This comes from the industry that claims the high cost of fuel is not their fault. 

18 bill pesos is only 322 mil USD.  Peanuts for a company of that size..  They had a loss two years ago and small profit last year.

Do you want them to lose money and sell the business back to the government.  The government would really make a mess for consumers.

There is one guy and one agenda responsible for global high fuel prices.  Believe it or not.

[Snowy79]

I'm no expert but from my understanding most of the profit is in speculating on new oil finds. Made up figures but the basics are the companies speculate that a certain area has so much oil and extraction costs and refining are $50 per barrel. They estimate how much it will sell for then decide if they'll spend billions extracting it. It takes a few years to extract from scratch and they hope oil prices will rise. At $100 per barrel they make a fortune but in the past oil prices dropped below extraction and refining cost which explained their big losses previously. 

[OnMyWay]

5 hours ago, Snowy79 said:

I'm no expert but from my understanding most of the profit is in speculating on new oil finds. Made up figures but the basics are the companies speculate that a certain area has so much oil and extraction costs and refining are $50 per barrel. They estimate how much it will sell for then decide if they'll spend billions extracting it. It takes a few years to extract from scratch and they hope oil prices will rise. At $100 per barrel they make a fortune but in the past oil prices dropped below extraction and refining cost which explained their big losses previously. 

Yes, that probably fits a lot of global giants, but Petron is not even on that map.  I don't think they extract.  Some of their products are imported oil refined in their own refineries, but I suspect they import finished products too.

[baronapart]

A side note about Petron. I have had Lapu-Lapu's revenge twice while out walking in Cebu and Manila. Both times a fortunately located Petron station rescued me. Whenever we see one now my wife will say "There is your Savior." In my book they deserve all the profits they can get ;-) Please carry on with your serious discussion...