Industrial gas trader Pryce Corp. expects 2015 to be a banner year as it more than doubled its third quarter consolidated net income from a year ago on the back of bigger sales in liquefied petroleum gas.
In a disclosure to the Philippine Stock Exchange (PSE) on Tuesday, Pryce Corp. said its income from operations for the third quarter of 2015 jumped by 116.2 percent from P267.4 million in 2014 to P578.3 million in 2015.
Pryce Corp. said the increase was driven mainly by the large increase in liquefied petroleum gas (LPG) sales volume, with improvement in consolidated gross margin and tighter cost control.
Its revenue, however, declined by 16.2 percent from P4.9 billion in 2014 to P4.1 billion in 2015.
This was due principally to a 60-percent fall in LPG prices year-on-year.
The LPG sales volume for the period rose by 42.8 percent, from 72,644 motor tankers (MT) in 2014 to 103,769 MT in 2015.
One factor that drove the sales growth was the lower retail price that made LPG affordable to a larger number of household consumers. Another is the overall economic growth, and also, the expansion in the company’s import and distribution infrastructure for LPG, particularly in Luzon.
LPG sales accounted for the bulk of the company’s revenues at 90.7 percent in 2015, compared to 80.4 percent in 2014.
Revenues from the other products, such as industrial gases, fuels, real estate, hotel operations and pharmaceutical products—the latest addition to the Pryce Group—contributed an aggregate of P383 million in 2015.
Revenues from other products in 2014 were much higher though at P957.7 million, since P571 million of this came from the one-time sale of a commercial property to a mall developer.
Excluding the non-recurring sale, revenues from other businesses in 2014 grew slightly higher at P386.7 million.
Gross margin from LPG and gases widened from 14.1 percent in 2014 to 23.9 percent in 2015.
“The gradual stabilization of the international contract price (CP) for LPG to relatively low levels in 2015 favored the recovery of margins lost in the previous period, during which the CP was spiraling downwards,” the company said.
Operating expenses were successfully reduced by 18.8 percent from P536.7 million in 2014 to P436 million in 2015.
Operating expenses were held in check, even as management provided support for more aggressive marketing efforts to increase sales volume.
“This tight rein on operating costs resulted in a slight improvement in expense ratios from 11 percent of sales in 2014 to 10.6 percent in 2015,” the company said.
After adjustments for other income and expenses and provision for income tax, net income after tax more than doubled at 124.7 percent from P201.7 million in 2014 to P453.2 million in 2015.
The company expects 2015 to be a banner year and is on track to meet its income projections.