Pilipinas Shell earmarks P4.3B for 2018 capex
By Victor V. Saulon,
Sub-Editor
PILIPINAS SHELL Petroleum Corp. is spending P4.289 billion in capital expenditure this year, particularly for its retail, manufacturing and supply businesses.
In its detailed information statement submitted to the stock exchange on Thursday, the company also disclosed its target capital expenditure for 2019 and 2020 at P3.903 billion and P4.196 billion, respectively.
“Capital expenditures for retail principally relate to the planned establishment of new retail service stations,” the company said.
Last year, Pilipinas Shell opened 66 retail stations, bringing the total to 1,044 by yearend.
Of the 2018 outlay, up to P2.636 billion has been allocated for retail, and P1.653 billion for manufacturing and supply.
“Capital expenditures for manufacturing and supply principally relate to the refinery’s hydrogen optimization in 2018 and 2019. Additional capital expenditure for manufacturing and supply also relate to the improvement of existing supply and distribution sites,” Pilipinas Shell said.
This year’s planned spending compares with the company’s capital expenditure of P4.665 billion in 2017. The 8% increase over last year shows a reversal of the spending distribution, which last year was higher for the manufacturing and supply business.
For this year, Pilipinas Shell said it expects to fund the planned capital expenditures “using cash generated from operations.”
The company’s budget for 2018 is a revision of its previously disclosed figure of P4.372.2 billion. Last year, it reported the planned expenditure for 2019 and 2020 at P4.431 billion and P2.025 billion, respectively.
Last year, Pilipinas Shell’s capital expenditure for its manufacturing and supply business largely related to the planned turnaround and upgrade of the Tabangao refinery in Batangas City to enable the production of bitumen, and revamp of the facility’s catalytic cracking reformer to a continuous reformer.
Earlier this week, Pilipinas Shell reported a 39% increase in net income to P10.4 billion in 2017, fueled by the strong growth in retail volume and regional refining margins, and gains in inventory holdings.
It also generated cash from operations of P10.7 billion, higher by 26% compared with the level in the previous year.
The company said the profit rise came despite more aggressive competition and the two-and-a-half-month planned preventive maintenance shutdown of its Tabangao refinery.
On Thursday, shares in Pilipinas Shell closed higher by 0.66% at P61.40 each.
