Listed firm Pilipinas Shell Petroleum Corporation suffered a humongous net loss of P16.2 billion last year, a complete reversal from its P5.6 billion net income logged in 2019.
The oil company qualified though that 73 percent or P12 billion of its losses last year had been mainly traced to one-off item that was booked relating to the termination of its refining operations in Tabangao, Batangas and its subsequent move to convert the facility into a world-class oil import terminal.
Pilipinas Shell President and CEO Cesar G. Romero emphasized that “transforming the refinery into a world-class import terminal last August was a difficult but vital decision to make given the negative outlook for the refining sector worsened by the COVID-19 pandemic.”
And while that was a tough business decision, the company chief executive asserted that it was a step Pilipinas Shell had taken “to be more competitive and ratable in the future.”
He said the refinery’s shutdown and eventual business model recasting would enable the company “to secure jobs for over 134 out of the 217 impacted refinery employees” -- with some having been re-deployed to other Shell affiliate-firms in the Philippines; while 26 have opted for voluntary retirements.
Further, Pilipinas Shell noted that P4.8 billion of its booked losses had been “due to drastic decline in crude prices,” especially in the second quarter of last year when global prices plummeted to as low as $20 per barrel.
The company said its financial result somehow improved in the fourth quarter with P0.4 billion core net income; which was considerably a bounce back from the third quarter core net loss of P0.7 billion.
“As mobility restrictions were relaxed, fourth quarter marketing volume delivery saw a 30-percent increase versus second quarter,” the company said. On the whole, Pilipinas Shell ended the year with 5.1 billion liters of volume sales; which was 13-percent lower if reckoned on pre-pandemic level.
Amid the lingering challenging environment for oil markets, Pilipinas Shell indicated it will continue “to strengthen its financial position as it successfully pursued its strategic priorities of care, continuity and cash in this unprecedented year.”
The oil firm similarly stated that it was able “to sustain its balance sheet strength despite the pandemic, as it reduces its gearing from 47-percent in third quarter to 41-percent by year-end supported by its positive cash flow from operations.”
Pilipinas Shell further noted that it surpassed its ‘cash conservation’ target, with this reaching P3.9 billion, which had been roughly double vis-à-vis the earlier set target of P2.0 billion.
“We are slowly seeing the results of our agility and decisiveness to thrive from the challenges posed by the global pandemic,” he said, expressing confidence that the company will be continually “driving fuel mobility and getting the country back on track as it recovers from the impact of the pandemic.”