PILIPINAS Shell Petroleum Corporation (Pilipinas Shell) posted net income of P7.4 billion in 2016, more than double the P3.6 billion it booked in 2015.
In a disclosure to the Philippine Stock Exchange (PSE) on Wednesday, the oil giant said the strong financial performance was driven by increased premium fuel penetration, strong retail volume growth, successful marketing campaigns, and logistics cost savings that offset the impact of lower commercial sales volumes and extended refinery downtime in the fourth quarter.
The company said premium fuel penetration increased to 27 percent from 23 percent in 2015, adding that the growth of its retail network helped it generate strong cash flows to fund its investment programs and end 2016 with 996 active retail sites.
Retail volumes grew 4 percent from the prior year, with Bitumen and Lubricants exhibiting double-digit growth from 2015 to 2016.
It said Shell Helix and Shell Advance delivered strong brand performance through innovative methods, marketing initiatives and cost management efforts that boosted the growth of Lubricants business. The increasing number of infrastructure projects in the country supported the growth of Bitumen business.
Its gearing ratio further improved to 27 percent in 2016 from 37 percent in 2015 mainly due to early repayment of debts and higher earnings in 2016. Pilipinas Shell paid out an interim dividend based on first-half 2016 results in August last year, amounting to P3.3 billion.
In January 2016, Pilipinas Shell started producing Euro-IV compliant fuels in line with its commitment to promote smarter mobility and smarter products in the country, while its North Mindanao Import Facility (NMIF) in Cagayan de Oro started operations in June 2016.
NMIF is considered a game changer for the company as it is positioned to deliver significant logistics cost savings.
“Pilipinas Shell will continue to focus on maximizing cash generation while optimizing shareholder returns; carrying out disciplined expansion and capital allocation; and generating attractive dividends of at least 75 percent of prior year audited net income,” the oil giant said.