PETRON CORP. incurred a net loss of P4.9 billion in the first quarter, a reversal of its P1.3-billion income a year ago, as it noted “significant” inventory losses due to the price collapse in both local and international oil markets when demand contracted.

In a stock exchange disclosure on Tuesday, the Philippines’ largest oil refiner and marketing firm reported a 16% decline in overall revenues to P104.6 billion during the quarter brought down by lower sales, citing the “sudden and significant” drop in demand for petroleum products during the lockdown period.

The listed unit of San Miguel Corp. said its combined sales volume for its businesses in the Philippines and Malaysia was at 24.7 million barrels, lower compared to the 26.3 million barrels recorded in the same quarter in 2019.

“The entire industry is going through a rough phase because of COVID-19’s (coronavirus disease 2019) impact on oil demand and prices. As expected, domestic consumption has gone down particularly in retail and aviation which is understandable because of travel bans and restrictions,” Petron President and Chief Executive Officer Ramon S. Ang said.

The oil company has implemented “strict” cost-saving and cash conservative measures to respond to such a financial situation.

Since the implementation of the enhanced community quarantine in the country, Petron has temporarily shut some of its refilling stations or shortened operating hours as lesser cars are traveling during the period.

On May 5, Petron closed its Bataan refinery for maintenance activities on its major process units. It expects that the shutdown will help reduce the impact of low fuel demand and poor refining margins.

The company has assured it has enough inventory to meet the local market requirements, which will be replenished through the importation of finished products.

“Business is challenging. We have to be more prudent in managing our resources while ensuring that the needs of our customers are still met,” Mr. Ang said.

“Demand recovery will depend upon the lifting of quarantine measures and ultimately, finding a vaccine to fully restore mobility. While we are hopeful for a swift recovery, we know that these are things we cannot rush. The health and safety of the people is still the most important,” he added.

The oil refiner has a capacity of 268,000 barrels per day, while it operates about 40 terminals in Southeast Asia. It has over 3,000 service stations selling gasoline and diesel.

On Tuesday, shares in Petron were down 1.01% to close at P2.93 apiece. — Adam J. Ang

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