PETRON Corp. reported on Tuesday its consolidated net income hit P10.8 billion in 2016, a 73 percent increase from the P6.3 billion recorded in 2015.
The country’s largest oil refining and marketing company attributed the earnings growth to record sales volumes, operational efficiency, and effective risk management.
“We exceeded expectations in 2016 and are well-poised to sustain our growth momentum this year with our continued focus on profitable market leadership, optimal product yields from our refinery, and further synergies internally and with other San Miguel companies,” Petron President and CEO Ramon S. Ang said.
Combined sales from Petron’s Philippine and Malaysian operations hit a record 104.3 million barrels, or a 6 percent growth from the 98 million barrels sold in 2015.
In the Philippines, Petron’s domestic volumes grew 10 percent to a record 48.2 million barrels in 2016. Sales of high-value products—gasoline, diesel, and Jet A-1/kerosene—rose 14 percent or by 6.2 million barrels equivalent.
In Malaysia, domestic volumes grew by 8 percent in 2016, fueled by strong sales in both the retail and commercial sectors. The launch of innovative fuels–Blaze 100 Euro 4M and the Turbo Diesel Euro 5–helped to drive volumes at Petron stations while in the commercial business, increased demand from strategic sectors and additional volumes from new accounts also helped push sales, Petron said.
The company said the surge in volumes helped offset the drop in revenues due to lower crude oil and product prices. It noted that the benchmark Dubai crude averaged $41.27 per barrel in 2016 compared to the full-year 2015 average of $50.91 per barrel.
As a result, it said consolidated revenues decreased by 5 percent to P343.8 billion, but operating income grew 31 percent to P23.8 billion.
Petron said 2016 marked the first full year of commercial operations for its $2 billion refinery upgrade, which enabled the company to produce more high-margin fuels and petrochemicals supporting the substantial growth in sales. Costs have likewise gone down since its 180,000 barrel-per-day Bataan refinery can now process cheaper crudes.
At the end of 2016, Petron acquired a 140-megawatt co-generation plant from sister company SMC PowerGen Inc. The solid fuel-fired plant located beside Petron’s refinery is expected to lower steam and power costs at the facility.
Another strategic project is the retail network expansion program that enables Petron to channel increased production from its refinery to its service stations. There are nearly 2,300 Petron stations nationwide. There is a similar program in Malaysia targeting underserved markets.
“With the expected rise in vehicle sales, the influx of tourists, and more manufacturers setting up shop in the country, we are confident that we will be able to capture this growth since we are backed by the most extensive distribution and retail value chain in the country,” Ang added.