Shell net income slows down to P1.2-B in 2023

Multinational subsidiary Shell Pilipinas Corporation closed 2023 with earnings slowing down to P1.2 billion compared to the previous year’s rosier bottom line of P4.1 billion.

The company indicated that its financial performance last year still placed the company on a solid footing - propelling Shell Pilipinas as a resilient industry player and service provider to customers despite the recurring turbulence in market dynamics – not just on the macroeconomic standpoint of its host-domestic market, but also globally.

Shell specified that its marketing business posted a “remarkable turnaround in 2023, with delivery surging by over 60% compared to 2022.”

Cash flow for the firm’s operations reached P4.3 billion, exclusive of the P9.6 billion worth of working capital funneled into its ongoing projects as well as operational needs.

The mobility segment of the firm’s business, in particular, registered 4.0% volume growth in sales, while Shell also maintains market reign for its premium products.

“Shell Pilipinas continues to hold a high position in the premium fuels and lubricants market,” the company stressed.

As emphasized by Shell Pilipinas President and CEO Lorelie Quiambao-Osial, the company had shown resilience and was able to deliver positive financial results “amidst market pressure in 2023.”

She expounded that “despite external challenges, we were still able to gain higher marketing earnings while introducing new and innovative offers.”

Strong outcome in non-fuels segment

The non-retail component of the company’s business had been similarly robust, logging double-digit growth of 13% last year, and that was driven mainly by “strategic partnerships with lifestyle and other brands, higher lubricants sales and a surge in food and beverage sales.”

Sales on its self-branded Shell Café, in particular, had doubled; while food sales had climbed 40%, with reinforcement coming from its two new branches.

Shell explained that “macroeconomic factors such as elevated interest rates and decline in global fuel prices impacted the company’s overall profitability in 2023,” but the upside lies in the fact that “the company was able to navigate through these obstacles by strategically increasing volumes and maintaining a focus on premium products.”

The other strategy embraced by the company had been on “prudent cost management”; and that eventually turned in at least P900 million worth of savings through the organization’s supply and value chain.

Onward, Shell conveyed that it will carry on with its marketing and promotional play to lure more customers at its mobility stations – and these will include cornering more loyalty program members for its Shell Go+ app.

Within the business-to-business (B2B) realm of its operations, the company’s Fleet Solutions offer not only beefed up its customer base, but this likewise served as a platform for it to collaborate with partners on their decarbonization goals.

Rosier financial prospects for 2024

“Shell Pilipinas is poised for even greater success alongside the country’s projected growth in 2024,” it highlighted.

The company is similarly flourishing on gradually setting up charging infrastructure solutions in the electric vehicle (EV) development space – the latest installation has been the EV charging points at Seven Neo Building in BGC, and that facility draws power supply from a geothermal resource.

Additionally, Shell is stepping up on customer-solutions at the e-commerce sphere, primarily for its lubricant sales; while also keeping on with escalation of volume sales to the aviation sector – with that segment growing at remarkable 12% in 2023 versus the prior year.

Osial asserted that “at Shell Pilipinas, we're committed to being a driving force in the Philippines' energy sector. By prioritizing innovation, efficiency, and solutions that put our customers first, we're paving the way for a future that's not only more resilient, but also more sustainable.”

The company’s bitumen venture had also proven to be a strong ally of the country on its infrastructure buildout   – serving the needs of the construction sector primarily for road projects.