Petron income falls 70% to ₱3.6 billion

Published November 5, 2019, 12:00 AM

by manilabulletin_admin

By Myrna M. Velasco

On lower sales volume in the Philippines and continued volatility in global prices, the three-quarter income of leading player Petron Corporation had still been down 70 percent at a squeezed profitability of ₱3.6 billion for the period from ₱12.1 billion in the same January to September stretch last year.

The oil firm said operations in Malaysia emerged partly as its saving grace as that offshore market’s sales volume had been up by 2.0 percent.

The continued downtrend in the company’s income had been attributed by Petron to “prolonged depressed refining margins and its refinery shutdown.”

The oil firm said it “managed to book a modest net income,” mainly because of “Petron Malaysia’s operations and its parent company’s extensive efforts to manage costs and keep the business viable under the current volatile market condition.”

On the basis of consolidated revenues, Petron reported that this was lower by 9.0 percent in the last three quarters at ₱381.7 billion.

And relative to the 7.0 percent decline in Philippine sales volume, the oil firm explained that this was mainly due to the downtime of its Limay refinery in Bataan – which started in April and was only able to resume normal operations in August.

The dismal performance at the parent level, nevertheless, had seen some “redeeming facets” in the more favorable financial outcome of operations along freeport zones such as in Subic and Clark.

Petron President and CEO Ramon S. Ang credits such to the manifest “level playing field” that the industry players have in servicing these freeport zones – primarily so since these are domains freed from payment of taxes.

And for that, the Petron chief executive surmised that smuggling could be one reason why some tax payment-abiding industry players could be losing on volumes against cunning competitors.

Ang lamented that “oil smuggling has worsened in recent years, and it’s not only us in the industry but also the government and the entire nation that suffer because of it.”

With smuggled oil commodities being peddled into retail markets, the felonious players would be able to sell their products at a cheaper price, while those paying taxes would not be able to afford unconscionable price reductions.

Given such predicament, Ang asserted that “this level playing field is what we hope will prevail in the entire country once the fuel marking program is in place,” in reference to the policy set forth by the Department of Finance (DOF) for the downstream oil sector.

Ang indicated that while the industry fully supports the fuel marking policy, he opined that “this mechanism will only work if all players go by the same rules.”