Phoenix Petroleum Philippines, Inc. has stayed relatively unscathed, the Davao City-based oil company said, as the coronavirus pandemic persists to challenge an industry that has suffered from a slump in consumer demand.
“Compared to what has been reported by the industry, we generated an operating income and a positive EBITDA (earnings before interest, taxes, depreciation and amortization). Further, we are encouraged by positive results in April and May enough to suggest worst is behind us,” said Henry Albert R. Fadullon, the new president of the independent oil firm in a statement on Thursday.
In the first quarter, Phoenix recorded a gross profit of P1.7 billion on the back of revenues of P21.9 billion, leading to an EBITDA of P503 million. Operating income and net loss stood at P179 million and P215 million, respectively.
The petroleum industry is experiencing challenges because of geopolitical tensions compounded by the coronavirus pandemic, Mr. Fadullon said, adding that these factors began to weigh on demand towards March.
The company claims that it has remained resilient compared with other major players.
“Definitely Phoenix has not been spared from the challenges, but we are able to navigate the downturn better due to our earlier investments in strategic, higher-margin and diversified businesses areas such as retail and liquified petroleum gas (LPG),” Mr. Fadullon said.
During the period, LPG volume climbed by 39%, with the company’s core market in the Visayas and Mindanao consistently growing by double digits. Expansion was sustained in Luzon, Phoenix said.
In fuel, retail volume was higher by 9% after the network expansion in 2019. The company opened 660 stations nationwide as of end-March.
“In response to the ongoing COVID-19 public health crisis, we have identified three key strategies — keeping people safe, maintaining business-as-usual operations and preserving resources,” Mr. Fadullon said.
Phoenix adopted a work-from-home arrangement for most of its workforce, up until the end of the year. Operational staff are on a bi-weekly rotation and financial aid has been extended to employees. No COVID-positive case has been reported in the company.
Phoenix’s supply chain remains 100% online with 95% of its retail sites and LPG outlets open to serve customers. Around 60% of its FamilyMart retail convenience stores are operating. The company is pursuing e-commerce platforms for cashless transactions.
The company has also adjusted to demand changes by keeping inventory levels to 50% of terminal capacity, which reduced the burden on working capital.
Cash requirements were reduced by at least P2.3 billion this year compared with the original plan. Of this amount, P1.5 billion is from capital expenditure reduction and P800 million has been saved from marketing, advertising, and travel as resources shift from traditional to digital channels.
Phoenix has set aside P100 million for COVID-19 relief efforts. It provides free fuel for the transportation of frontliners as well as for the delivery of fresh produce from farmers in provinces as part of parent company Udenna Corp.’s Sagip Saka program.
FamilyMart continues to share free meals to healthcare workers and other frontliners, while Phoenix Super LPG supplies cooking fuel to community kitchens in various local government units and agencies.
