Pilipinas Shell Petroleum Corp., the country’s second largest oil company, declared a cash dividend of P3 per share, translating into a total of P4.8 billion or 95 percent of the audited net income in 2018.
Pilipinas Shell registered a net income of P5.1 billion in 2018, down 50 percent from P10.37 billion in 2017, following the drop in oil prices in the fourth quarter.
The company said the cash dividend surpassed its commitment to maintain a dividend payout of at least 75 percent and was the highest payout ratio since the initial public offering in 2016.
Pilipinas Shell ended 2018 with a dividend yield of about six percent.
“We generated P14.1 billion cash from operations last year, which allows us to not only cover our dividend payments, but also to fund P6 billion worth of capital expenditure this year,” says Cesar Romero, Petron President and chief executive officer in a statement.
The dividend, approved by the board on March 21, 2019, will be paid on April 30, 2019 to stockholders on record as of April 5, 2019.
Pilipinas Shell’s return on average capital employed remains high at 15 percent in 2018, reflecting the company’s ability to efficiently utilize capital to generate competitive returns.
The company said with a healthy balance sheet, it was well-positioned to fund growth and sustain the attractive dividend policy. Retained earnings stood at P11.1 billion as of end 2018.
Romero said the company was increasing its capital expenditures from P4.1 billion last year to the support expansion plans of the retail business, including the opening of some 50 to 70 new sites in strategic locations in 2019.
The company earlier announced a P6-billion capital expenditure program this year.
Shell plans to use part of the budget to implement projects in the mid-term to enhance the crude flexibility of the 110,000-barrel-per-day Shell Tabangao Refinery.
“We are investing in our facilities and infrastructure to deliver strong returns to the public we continue to serve, including our investors. This means sustained reliable service, world-class quality products, and tangible returns for our shareholders,” Romero said.
“We are confident that the company’s underlying performance remains intact and that we will meet our growth aspirations in the coming years,” he said.