PETRON CORP. on Tuesday reported a 72% decline in its first-half net income to P2.6 billion, as sales volume in the Philippines declined due to the implementation of the second tranche of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

In a statement, Petron described the first half financial results as “reflecting modest gains amidst the slump in regional refining margins that penalized Philippine operations by as much as P5 billion during the period.”

“These setbacks are just temporary and are all part of the business. We remain optimistic for the second half of the year given signs of modest recovery from gasoline and petrochemical margins recently seen in the market,” Petron President and Chief Executive Officer Ramon S. Ang was quoted as saying in a statement.

The company, whose local and foreign refining capacity amounts to 268,000 barrels per day, has not yet released its quarterly report.

Consolidated sales during the first six months fell 7% to P254.8 billion. Petron operates about 40 terminals in the region, and over 3,000 service stations where it retails gasoline and diesel.

“While Malaysian sales volume grew by 4 percent and partly offset that of the Philippines, the decrease in Philippine sales reflects decline in volume due to the implementation of the second tranche of TRAIN Law, which brought total fuel taxes to an average of P6.75 per liter equivalent to over P15 billion excise taxes for the first half,” it said.

“Furthermore, such developments encouraged illegal business practices during the period,” it added.

Petron opened 72 stations in the Philippines and 24 stations in Malaysia during the first half.

The listed firm also said it would resume normal operations at its Bataan refinery after completing scheduled repair works, including damage from the April 22 earthquake that hit Central Luzon and Metro Manila.

On Tuesday, shares in the company fell by 1.11% to P5.36 each. — V.V.Saulon

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