Petron swings to P11-B loss as revenues fall

LISTED oil company Petron Corp. reported on Wednesday a net loss of P11.4 billion last year, swinging from a net income of P2.3 billion a year earlier, as sales declined due to the pandemic.

In a press release, Petron said that its consolidated revenues last year declined 44% to P286 billion, reflecting the impact of the global health emergency on its financial performance.

“For the whole of 2020, the company’s consolidated sales volume stood at 78.6 million barrels, down 27% from 2019’s 107 million barrels,” the country’s largest oil refining and marketing company said.

During the fourth quarter, however, Petron recorded a consolidated net income of P1.2 billion, which it attributed to “increased volumes and inventory holdings gains” as prices started to rally. The firm posted a P1.63-billion consolidated net income in the third quarter.

But the company noted that refining margins still remained soft in the fourth quarter, which challenged the economic viability of its Philippine operations.

Meanwhile, Petron’s consolidated revenues from October to December hit P69.6 billion, which it said “marked two straight quarters of growth” after the firm’s historic slump in the second quarter due to the pandemic’s impact.

“The last quarter of the year registered a 46% improvement from the P47.7 billion reported in the Q2, Petron’s hardest hit quarter in 2020,” it said.

Ramon S. Ang, Petron president and chief executive officer, said that the firm had been “working hard to minimize the pandemic’s impact on its business.”

“(O)ur performance in the second half of 2020 proves that we are moving in the right direction. We look forward to sustaining our recovery as we anticipate higher demand and a more stable industry situation with an end to this crisis finally in sight,” Mr. Ang said in a statement.

The firm, which also has a strong presence in Malaysia, said that it is now focused on improving its competitiveness.

In its statement, Petron said that its Bataan refinery’s inclusion as a registered enterprise of the Authority of the Freeport Area of Bataan (AFAB) would benefit the company in the paying of value-added taxes, which would be done as products are withdrawn from the refinery.

“We continue to implement various cost saving efforts, but tax efficiency is another critical area that should improve. Our AFAB registration will help make our refining business more competitive and financially viable as soon as demand recovers,” Mr. Ang said.

Petron said that it looks forward to a significant demand recovery in 2021, and it plans to resume its refining operations by the second half of the year.

It announced in December that it was suspending the operations of its 180,000 barrels per day refinery — the sole refining facility in the Philippines — to minimize losses from weak refining margins.

Petron, a unit of diversified conglomerate San Miguel Corp., has a combined refining capacity of 268,000 barrels-per-day and produces a full range of world-class fuels and petrochemicals.

Shares of Petron in the local bourse inched down 0.87% or three centavos to finish at P3.41 apiece on Wednesday. — Angelica Y. Yang