PETRON Corporation, the Philippines’ largest integrated oil company, posted on Monday a consolidated net income of P5.3 billion for the first half of 2016, up 55 percent from the P3.4 billion recorded a year earlier, on strong growth in sales volumes.
Petron said earnings improved on an expansion in sales volumes supported by its aggressive network expansion, improved production and cost efficiencies, and a deeper focus on customer programs.
Consolidated sales volumes in the Philippines and Malaysia jumped 9 percent to 51.8 million barrels in the first six months of 2016 from 47.4 million barrels in the same period in 2015.
Petron saw robust growth across its major businesses comprising retail, industrial, liquefied petroleum gas (LPG), and lubricants in both countries.
In the Philippines, industrial sales grew 14 percent from a year ago with increased participation in aviation and power generation, while its lubricants and LPG businesses posted growth rates of 18 percent and 12 percent, respectively, fueled by higher demand from the transport sector and households.
Petron remained the domestic industry leader in retail with 2,230 service stations and hundreds more in various stages of development.
However, consolidated sales revenues for the period dropped by 13 percent to P161.9 billion from P186.1 billion in the first six months of 2015 due to lower crude oil prices.
Dubai crude averaged $36.80/barrel in the first half of 2016 compared to $56.59/barrel last year.
Despite weaker oil prices and reduced product “cracks” (the differential between the prices of crude oil and finished products), Petron’s margins were sustained by its $2 billion Bataan refinery upgrade, which has substantially increased the production of higher-value white products and petrochemicals.
Petron’s operating income hit P11.5 billion from January to June this year, a 29 percent increase from P8.9 billion in the same period last year.
“Petron continues to deliver strong results amid the prolonged slump in oil prices. This is a direct effect of much improved operational productivity and the expansion of our markets,” Petron president and CEO Ramon S. Ang said in a statement.
“We are well-positioned to sustain our performance throughout the year,” Ang concluded.