PETRON Corp., the country’s largest petroleum distributor and refiner, expects net profit this year to balloon to P22 billion from its earlier projection of P18 billion as international oil prices continue to rise.
“We would most probably surpass the P18 billion earlier net income projection,” Petron President Ramon Ang said in an interview.
“If the trend in oil prices continues for the rest of the year, we would probably attain P22 billion in net profits,” said Ang, who is also the president and chief operating officer of diversified conglomerate San Miguel Corp. (SMC).
Last year, oil prices averaged about $50 a barrel, while in the early part of 2016 prices slid to a low of $30 a barrel. Oil prices have since strengthened, hovering at present around $50 a barrel.
This year, Petron is producing at least 93 percent liquid yield in its refineries, and the company may achieve an operating income of $600 million to $700 million for the year based on an oil price average of $40 per barrel.
The said liquid yield pertains to Petron’s recovery rate of white products, such as gasoline and diesel, from crude. Ang said prior to the commissioning of its refinery, Petron could only produce 66 percent liquid yield from crude.
Petron said the Bataan refinery has recently become very efficient in its fuel extraction, with output reaching 180,000 barrels a day.
“That means it has achieved maximum liquid yield and even for petrochemical products, this has been achieved,” Ang was quoted as saying earlier this year.
Petron invested $2 billion in its Bataan refinery upgrade and further spent another $700 million to build a power plant to supply electricity to Petron and supply another 600 tons per hour of steam.
“Can you imagine that at $30 per barrel, we will be tracking $650 million in cash flow? And this year, 2016, I think Petron will give us P18 billion net income [even with global oil prices]at $30 per barrel,” Ang has stated earlier.
In 2015, Petron reported a consolidated net income of P6.3 billion, more than double the P3 billion realized the previous year, driven by a surge in sales volumes, better refining margins and effective risk management.
The latest earnings forecast would mean a net income growth for Petron of 246 percent this year.
Ang added: “P22 billion in net income is attainable. We are very bullish given the trend right now, so we are very happy.”