By Arra B. Francia, Reporter
PILIPINAS Shell Petroleum Corp. is ramping up spending to P6 billion in 2019, even as earnings fell due to the higher inflation and the weaker peso last year.
The listed firm said in a statement Friday that it plans to hike its capital expenditure by 46% this year, from the P4.1 billion spent in 2018.
“Pilipinas Shell plans to increase its investment to around P6.0 billion to support expansion plans of the retail business and optimization projects in the manufacturing and supply segment in 2019,” the company said.
The higher spending comes amid a drop in earnings last year, as Pilipinas Shell booked a net income of P5.1 billion. The company did not provide a comparative figure in its statement, but its 2017 filing shows that net income stood at P10.39 billion then, indicating a 51% plunge.
“We acknowledge the achievements of our people in delivering on our priorities, despite the challenging year… Strong corporate governance, consistent strategy, and commitment to our core values give us the confidence to compete in a challenging business environment,” Pilipinas Shell President and Chief Executive Officer Cesar G. Romero said in a statement.
Pilipinas Shell said its retail business remained to be the key driver of earnings in 2018, despite heightened competition, higher pump prices, and the nine-year high inflation during the third quarter.
The company ended 2018 with 1,084 locations following the opening of 50 new sites. It plans to add 50 to 70 more this year.
Its non-fuel retailing business, which includes its convenience store chain, posted a double-digit growth last year. The company opened 75 new Shell Helix Oil Change+ and Helix Service Centers, beyond its initial plan to open 30 to 50 sites. It likewise opened 33 Select stores and 17 deli2go stores, also way beyond its store expansion target of 15 to 20 locations.
Pilipinas Shell said it plans to implement projects that will enhance its Tabangao Refinery in the mid-term, in order to address the low refining margin environment in the region. It also noted that its North Mindanao Import Facility helped it post logistics savings better than initially expected.
Shares in Pilipinas went up 0.3% or 15 centavos to close at P50 each at the stock exchange on Friday.