Oil refiner Pilipinas Shell Petroleum Corp. said Friday net income dipped 50 percent in 2018 to P5.1 billion from P10.37 billion in 2017, following the drop in oil prices in the fourth quarter.
The company said it remained bullish on its expansion plan with investments targetted at P6 billion this year.
“We acknowledge the achievements of our people in delivering on our priorities, despite the challenging year,” Pilipinas Shell president Cesar Romero said in a statement.
Romero said the company remained committed as a Philippine partner in nation-building for more decades after celebrating 105 years in the country.
“Strong corporate governance, consistent strategy and commitment to our core values give us the confidence to compete in a challenging business environment,” Romero said.
Pilipinas Shell said its marketing business delivered robust earnings despite the aggressive competition and higher pump prices in the most part of 2018.
It said the manufacturing segment recorded its highest reliability in five years, but the contribution to the integrated business was impacted by the sudden drop in crude prices in the fourth quarter and depressed regional refining margins.
Strong corporate governance, cash generation and capital discipline remained as Pilipinas Shell’s key strengths.
The company delivered P14.1 billion in cash from operations in 2018, sufficient to cover its capital expenditure and dividend payments for the year. Capital expenditure for 2018 reached P4.1 billion.
Revenues went up to P218.87 billion in 2018 from P169.475 billion in 2017. Cost and expenses, however, also went up to P210.38 billion from P156.441 billion.
Romero said Pilipinas Shell planned to increase its investment to around P6 billion to support expansion plans of the retail business and optimization projects in the manufacturing and supply segment in 2019.
“Our strong cash flows have enabled us to deliver superior dividends to our investors since the IPO [initial public offering] at levels that keep us among the highest dividend-yielding stocks listed in the Philippine Stock Exchange,” Romero said.
Pilipinas Shell, the country’s second-biggest oil firm, owns a 110,000-barrel-per-day refinery in Batangas. The Tabangao refinery posted its highest reliability performance in five years.