Oil refiner and distributor Petron Corp. said Tuesday consolidated net income jumped 110 percent in 2015 to P6.3 billion from P3 billion in 2014, despite the slump in global oil prices.
Petron said the significant profit increase was driven by a surge in sales volume, better refining margins and effective risk management.
“Petron beat expectations and posted solid results last year. Low domestic prices and continued growth in the Philippine and Malaysian economies, coupled with our strategic investments, enabled us to reach record-breaking sales volumes,” Petron president Ramon Ang said.
“We are right where we want to be as we continued to grow our business profitably and sustainably,” Ang said.
Petron said all business segments in the Philippine and Malaysian operations contributed to volume growth as combined sales volumes reached 98 million barrels in 2015, up by 13 percent from 86.5 million barrels in 2014.
Petron increased sales with strong demand coming from reseller, industrial and LPG segments in the Philippine market.
Service station sales grew 11 percent by volume while LPG grew another 16 percent over 2014.
Meanwhile, the company’s rebranding and upgrading program in Malaysia reaped dividends. Retail gasoline volume increased 11 percent year-on-year.
Petron’s revenues fell 25 percent to P360.2 billion in 2015 from P482.5 billion in 2014, mainly because of the 50-percent drop in oil prices.
Benchmark Dubai crude averaged $51 per barrel in 2015, down from $97 in 2014. Dubai crude is currently averaging $30 per barrel.
Petron said the company performance was bolstered by proactive risk management to mitigate the impact of inventory losses and currency depreciation.
The company said despite the weak oil prices in 2015, the differential between crude and finished products remained strong and the mix of higher value products improved, supporting refining margins which resulted in Petron’s operating income reaching P18.1 billion last year, up 138 percent from P7.6 billion in 2014.
Petron’s sales performance in the Philippines was supported by the initial test run and commissioning of the $2-billion refinery upgrade project in 2015.
Petron’s refinery hit a utilization rate of nearly 90 percent, with an average run of nearly 160,000 barrels per day in the first two months of 2016.
The company also continues to aggressively expand its service station network in both countries to push more profitable domestic sales.
As of end 2015, Petron had over 2,200 stations in the Philippines and another 570 in Malaysia.
“We are definitely on track to deliver better results this year as we reap the benefits of our expansion and upgrading projects. We are well-positioned to take advantage of business opportunities in the downstream oil industry and sustain our growth momentum,” Ang said.