PILIPINAS Shell Petroleum Corp. reported on Monday a net income of P5.6 billion in 2019, up by 11 percent from the P5.1 billion reported a year ago amid higher excise taxes on fuel products.
In a disclosure, the oil company attributed higher earnings to ”strong marketing delivery and refinery cost savings” that it said “helped temper the suppressed regional refining margins and higher excise taxes that affected the oil industry.”
“We are pleased with Pilipinas Shell’s business delivery for 2019, particularly in the light of last year’s business environment. Our company remains fundamentally robust and resilient. The marked volume growth across our business segments last year was not by chance; it is the result of consistent strategy and clear-cut focus on our objectives,” Pilipinas Shell President and Chief Executive Officer Cesar Romero said.
During the period, Pilipinas Shell said retail volume grew by 1.2 percent despite higher fuel excise taxes.
“This growth was driven by targeted marketing activities coupled with loyalty programs and further expansion of our network,” said Randy del Valle, Pilipinas Shell vice president for retail.
Pilipinas Shell opened 53 new stations in key areas across the country in the previous year, bringing the total number of its retail sites to 1,126 sites.
Non-fuel retail business climbed by 15 percent year-on-year. In response to Shell’s global effort to further increase network efficiency and bring more offers to customers, the company put up the first global pilot site in Cebu to further maximize real estate space in-stations.
Lubricants, bitumen, aviation and commercial fuels all posted volume increases, contributing to the overall commercial volume growth of 9 percent.
The bitumen business alone more than doubled its operating profits, increased nationwide footprint and exported to five countries in 2019.
Pilipinas Shell delivered close to P700 million in structural cost savings from its refinery at the end of 2019 to counter the depressed regional refining margins.
Furthermore, as a response to the International Maritime Organization 2020 implementation, the refinery developed the flexibility to produce low sulfur fuel oil (LSFO) since December last year. LSFO yields higher margins compared to high sulfur fuel oil.
“We will remain focused on strengthening our core businesses while being mindful of the evolving energy landscape. We will use our foundation of values and strong corporate governance as we continue to deliver on our strategy to make Pilipinas Shell a world-class investment case,” Romero said.
The listed firm aims to maintain its strong balance sheet to manage uncertainties amid the coronavirus disease 2019 pandemic and crude oil price volatility, which would enable the company to have the flexibility to seize opportunities once the Philippines recovers from the virus pandemic.
Meanwhile, Pilipinas Shell assured its customers of continued operations of Shell stations nationwide and the stable supply of fuel amid the community quarantine in Luzon and other parts of the country.
Pilipinas Shell shares tumbled by 20 centavos or 1.07 percent to close at P18.50 each on Monday.