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Petron books ₧1.73-billion profit in Q1 on higher oil prices

PETRON Corp. booked P1.73 billion in net income in the first quarter, a turnaround from the P4.9-billion net loss it posted last year and higher than the P1.2-billion net income in the fourth quarter of 2020.

Improving oil prices in the world market, savings on operational expenses and financing cost contributed to the oil firm’s first quarter results despite depressed demand.

First quarter volumes reached 19.38 million barrels, 21 percent lower than the 24.66 million barrels sold in the same period last year. Consolidated revenues likewise decreased 20 percent to P83.3 billion, from P104.62 billion a year ago.

Despite lower revenues, Petron delivered a turnaround in the first quarter with a P3.7 billion operating income coming from its P4.4 billion operating loss in the same period last year. It also recorded inventory gains due to the recent improvements in international oil prices in contrast with the inventory loss in the first quarter last year. In addition, Petron recorded savings on operating expenses and financing costs.

“As a company, we are doing all that we can to create a safe and healthy work environment while ensuring that our recovery stays on track. Petron is constantly evolving, and we will continue to work towards our goal of emerging stronger from this pandemic. 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,” said Petron President Ramon S. Ang.

To help the government achieve its vaccination goals, San Miguel Corp. (SMC), the parent company of Petron, is spending close to a billion pesos for its group wide Ligtas Lahat vaccination program, which aims to inoculate all 70,000 SMC employees and extended workforce.

“We are banking on the success of vaccination efforts here and abroad to boost our economy and the downstream business environment in general. While we have our work cut out for us, we are inspired to do more, grow stronger, and contribute further to society,” said Ang.

Petron has set aside P11 billion for its 2021 capital expenditures (capex), higher than the P8.5 billion it allocated last year. The amount covers its ongoing construction of steam generator plants, strategic retail network expansion, and maintenance requirements. Petron has put up 14 new stations in the first quarter with plans to build more for the rest of the year.

This year’s capex will be financed by a combination of internal cash generation and external financing sources.

Petron temporarily closed down its 180,000-barrels per day refinery in May last year and reopened in October. It again ceased refinery operations on February 10, 2021 and will reopen either May or June this year.

Following its approval as a registered-enterprise last December, the Petron Bataan Refinery has started to transition into the Freeport Area of Bataan and has also begun to avail of fiscal incentives from operating in a freeport zone.

In Malaysia, Petron’s two major expansion projects in Port Dickson Refinery—the Diesel Hydrotreater (DHT) and Marine Import Facility 2 (MIF2)—remained on track. The new DHT unit will enable the refinery to produce ultra-low Sulphur automotive diesel, while the MIF2 will expand its finished product storage capacity to support future growth in Petron Malaysia and at the same time generate savings on freight cost.

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