Pilipinas Shell income up 11% to P5.6 B

PILIPINAS SHELL Petroleum Corp. posted an 11% year-on-year jump in net income in 2019 on the back of its marketing activities and savings from refinery costs.

The oil company told the Philippine Stock Exchange on Monday that it recorded P5.6 billion in net income, as it spent P6 billion in expanding its retail network, supporting refinery growth projects, and bolstering supply and distribution capabilities.

According to Pilipinas Shell Vice-President for Retail Randolph T. Valle, the company’s retail volume grew by 1.2% with premium fuel penetration at 27% despite high excise taxes, lifted by marketing activities, along with its loyalty programs and network expansion.

The company added 53 new fuel retail stations, operating a total of 1,126 sites in 2019.

Meanwhile, its non-fuel business saw earnings rise by 15%.

Its overall commercial fuel volume expanded by 9%, driven by its bitumen business, which supports the government’s Build, Build, Build program. The oil firm’s Bitumen Production Facility has more than doubled its operating profits in the year as it ramped up its footprint nationwide and exported to five countries.

“The marked volume growth across our business segments last year was not by chance; it is the result of consistent strategy and clear-cut focus on our objectives,” Pilipinas Shell President and Chief Executive Officer Cesar G. Romero said.

Meanwhile, its refinery saved almost P700 million last year in structural costs to counter the depressed regional refining margins. In December, it turned to low sulfur fuel oil, which yields higher margins compared to high sulfur fuel oil.

The company has started building its integrated hydrogen manufacturing facility that could process more crude oil varieties and more quality fuels, as well as its integrated energy system, which could create a more sustainable energy footprint from solar energy, natural gas, and battery storage.

Amid the spread of the novel coronavirus disease 2019 (COVID-19) pandemic, Pilipinas Shell said it maintains its operations to provide stable fuel supply in areas under enhanced community quarantine.

“We continue to look for ways to appropriately support our key stakeholders and business partners, and commit to make the right sustainable decisions for the company in this time of challenges and uncertainties,” Mr. Romero said.

On Monday, shares in Pilipinas Shell fell by 1.07% to close at P18.50 each. — Adam J. Ang