PILIPINAS Shell Petroleum Corp. saw its net income in the first quarter of the year drop 19.7 percent to P2.3 billion from P2.9 billion in the same period a year, dragged down by lower regional refining margins.
Net earnings in the first quarter “translates to an industry-leading return on capital of 27% on a trailing 12-month basis, demonstrating the company’s continuing prudent and effective utilization of shareholder capital,” Pilipinas Shell said in a disclosure to the stock exchange on Tuesday.
“Amidst the challenges brought by higher excise taxes, customers continue to patronize our products,” Pilipinas Shell President and Chief Executive Officer Cesar Romero said.
“We remain pleased with our marketing businesses which continue to demonstrate strong underlying performance both financially, and operationally,” Romero added.
While softer regional refining margins during the quarter contributed to the roughly 20-percent decrease in overall earnings, its marketing business increased profitability by 13 percent, Pilipinas Shell said.
Gross profit slipped 2.6 percent to P7.1 billion while income from operations declined 12 percent to P3.7 billion.
But operational cash flows climbed 23 percent to P3.5 billion, attributed mainly to sales volume growth of 4 percent, higher premium fuel penetration, and better working capital management.
Pilipinas Shell opened four new filling stations this year, closing the quarter with 1,047 retail sites.
It said the non-fuels retailing business sustained its double-digit growth, closing the quarter with 21 percent growth. During the period, Pilipinas Shell added 11 new Shell Select stores, seven new deli2Go offers, and nine new lube bays.
“The Commercial segment’s contribution to net earnings increased in double digits due to more premium grade offerings and strong performance of the lubricants and bitumen business,” it added.
“We continue to reap the benefits from the North Mindanao Import Facility where we saw steady increase in supply reliability in the Visayas and Mindanao regions and sustained supply cost savings. The Tabangao Refinery also posted higher reliability building sufficient stocks in preparation for the scheduled maintenance in May,” the company said.
Shares of Pilipinas Shell closed down P0.75 at P53.05 each on Tuesday.