Phoenix Petroleum declares cash dividend to holders of preferred shares

Published May 12, 2021, 5:00 AM

by Myrna M. Velasco

Listed firm Phoenix Petroleum Philippines Inc. has declared cash dividend that will be paid to holders of its Series 4 (PNX4) preferred shares, according to the firm’s disclosure to the Philippine Stock Exchange.

The payout will be anchored on 7.5673-percent per annum interest rate; and will cover shareholders as of record date May 21, 2021 and to be settled on May 24 this year.

For the PNX3B series of the company’s preferred shares, it stated that go-signal on cash dividend declaration “has yet to be approved, including pertinent dates, which have yet to be set and determined.”

The Uy-led oil firm previously indicated that for it to shore up revenue stream, it will be re-calibrating business pivot to the high-margin retail segment of the downstream oil sector as well as on the liquefied petroleum gas (LPG) market.

“To drive our growth, we will focus on our higher margin, higher growth business like retail and LPG. Particularly on LPG, we will be focusing our efforts and our investments on higher margin SKUs (stock-keeping units) like households, particularly the cylinders,” Phoenix Petroleum President and CEO Henry Albert Fadullon noted.

Phoenix Petroleum President Henry Albert Fadullon

In addition to that, he said, “we will leverage on the partnership that we have established consistent with our capital-light strategy,” with him emphasizing that they target to monetize the Phoenix Petroleum brand through franchising and joint ventures.

The other core of the company’s business strategy moving forward, according to Fadullon, will be further leverage on technology – primarily the utilization of electronic commerce (e-commerce) platform “which will allow us to bring our offers closer, faster and easier to the customers.”

In strengthening the balance sheet of the oil firm, the company sought the approval of its stockholders for its management “to enter into negotiations with third party or any other entity for the possible disposition of certain assets of the company.”

Phoenix Petroleum added it will aim for “higher returns on invested capital due to increased efficiency and utilization of assets; lighter fixed asset base and decreased operating expenses; and improved credit risk profile and lower borrowing costs.”

Fadullon underscored the oil firm “will continue to term out and refinance portion of our short-term debt to lengthen our maturities.”

At the same time, he said, “we will deleverage and bring down debt by raising free cash and unlocking value on some of our assets.”

And while the new lockdowns continue to pose uncertainty over targeted recovery of the Philippine economy in general; and the oil sector in particular, the Phoenix Petroleum executive underscored that their first quarter sales results had been on upturn; and their April sales already exhibited pre-Covid level volumes.

Fadullon qualified that while the company had a low start in January, “we have very strong February and March results, such that our first quarter is looking much better than the previous quarter – the fourth quarter of 2020.”

He added that “on a consolidated basis, we are doing much better and this is because of our overseas affiliate delivering very strong performance.”

For the month of April, he highlighted that “it’s looking like it’s going to be our first month that is going to be very close pre-Covid, if not pre-Covid levels already, so I’m quite pleased with what we are seeing in our April monthly performance.”

But despite flourishing sales rebound, Fadullon emphasized that the company remains cautious, hence, it will be “selective in terms of the new activities that we start and so we will continue to be very cautious in terms of deploying our resources, particularly OPEX (operating expenses) and capex (capital expenditure) and expect that this will continue to be well-calibrated and measured, such that we’re able to preserve resources well into the future.”