The crash in global oil prices coupled with immense domestic demand contraction had knocked down leading oil firm Petron Corporation with P11.4 billion net loss last year from its P2.3 billion earnings in 2019.
The oil company indicated its sales declined by 27-percent to 78.6 million barrels versus brisk outcome of 107 million barrels in sales the prior year.
Such sales performance consequently sparked off 44-percent tumble on the oil firm’s consolidated revenues to P286 billion, which had been mainly attributed to the pernicious impact of the Covid-19 pandemic. That result had been compared to very rosy P514.4 billion revenues in 2019.
Petron President and CEO Ramon S. Ang has expressed confidence for a strong rebound stating “We have been working very hard to minimize the impact of the pandemic on our business; and our performance in the second half of 2020 proves that we are moving in the right direction.”
He added the company is looking forward “to sustaining our recovery as we anticipate higher demand and a more stable industry situation with an end to this crisis finally in sight.”
In the fourth quarter of last year, Petron reported P69.6 billion worth of revenues; and that had been a manifestation of “two straight quarters of growth, after experiencing a historic slump in the second quarter due to the pandemic’s economic impact.”
It specified that the company’s topline in the October-December period already registered an improvement of P47.7 billion in revenues vis-à-vis the enormous downtick it suffered from at the height of the enforced pandemic-induced lockdowns in the second quarter.
Underpinned by stronger sales volume that reached 19.08 million barrels – an increase of 6.6-percent from the second quarter sales of 17.9 million barrels (inclusive of Malaysia’s sales result), Petron likewise bounced back with P1.2 billion net income in the fourth quarter.
The oil firm said the improved financial standing of the company in the last quarter of 2020 had been “due to increased volumes and inventory holding gains as prices began to rally towards yearend.”
Petron, however, specified that “refining margins remained soft which challenged the economic viability of the company’s Philippine operations.”
Onward, the oil firm stated that focus will be on “improving its competitiveness,” and this could be ushered in by the recent government approval it secured that re-classifies the Petron Bataan refinery as a registered enterprise under the jurisdiction of the Authority of the Freeport Area of Bataan (AFAB). The Petron refinery will resume operations second half of this year.
The AFAB accreditation will allow the oil company to avail of fiscal incentives for special economic zone locators as prescribed under the Special Economic Zone Act of 1995 or the Omnibus Investment Code of 1987.
“This will benefit the company in the form of better timing on the payment of VAT (value added tax) which shall be upon withdrawal of the products from the refinery, Petron explained.