PRYCE Corp. (PSE: PPC) said its income grew 29 percent last year on higher sales of cooking gas. The company, however, warned it may incur a slower income growth this year because of a new tax law.
Pryce said on Wednesday its net income reached P1.24 billion for the entire 2017, up from the previous year’s P966.09 million.
However, the company said that with the implementation of new taxes, its income growth for the year may only reach 20 percent, or about P1.55 billion on a 15-percent expansion of sales volume.
PPC said it would be affected by the Republic Act 10963 or the Tax Reform for Acceleration and Inclusion Act as the law imposes relatively lower taxes on liquefied petroleum gas (LPG) as opposed to other fuels. The company didn’t elaborate.
Revenues last year rose 37 percent to P9.22 billion, from P6.72 billion in 2016, mainly on sales of LPG that grew 11 percent to 210,000 metric tons from the previous year’s 189,000 MT.
Despite this modest volume growth, its revenues were higher due to the sharp increases in LPG contract prices during the year at an average of $491 per MT in 2017, or $145 per MT higher than 2016’s $346 per MT.
“Volume growth was achieved mainly in the Visayas and Mindanao [VisMin] regions, where demand is more concentrated on fuel for household cooking. Sales in the VisMin regions experienced a 22 percent year-on-year volume growth as compared to about 4 percent volume growth in Luzon,” the company said.
Sales of LPG along with cylinders and accessories stood at P8.65 billion or about 94 percent of total revenues.
Industrial gas sales reached P391.49 million, accounting for 4 percent of total revenues, while real-estate sales and sales of pharmaceutical products accounted for the balance.
“For the year 2018, PPC will continue its expansion projects, started about two years ago, which aim to increase the storage capacities of its marine terminals and to bring its product closer to the markets. All its seven VisMin import terminals have been or will be expanded to enable each one to accommodate at least one shipload of 2,500 metric ton cargo,” the company said.
The expansion of its terminals in Albuera, Leyte and Santa Cruz, Davao del Sur was completed in 2017. Meanwhile, the expansions of the LPG terminals in Sogod, Cebu and Balingasag, Misamis Oriental will be completed by July or August this year.
The ability to discharge one shipload in a single terminal will reduce the company’s import costs by $10 per MT to $20 per MT.
The company is also building at least 15 refilling plants in the VisMin areas to make its product closer to the consumer markets. These expansions are expected to be completed by the end of 2019 and all are funded from internally generated funds.
Last year the company declared payment of cash dividends–the first after more than 20 years—out of its unrestricted retained earnings as of June 30, 2017.
“The company sees this move as the start of regular cash dividends which it intends to maintain on a regular basis in the coming years.”