The global COVID-19 pandemic is proving to be one of the most challenging times for businesses especially in the oil and gas industry, which some analysts consider at the losing end of the crisis.
World oil prices plunged to their lowest level in recent months amid low demand as businesses were forced to close shop while people stayed indoors as governments around the world imposed lockdowns to avoid the spread of the infection.
Domestically, around 10 percent of the country’s retail stations closed shop on weak demand while oil refiners were forced to implement temporary shutdown to temper losses.
However, independent energy company Phoenix Petroleum Philippines said it is now reaping rewards from its diversified portfolio, including its strategic and aggressive investments in fuel retail and liquified petroleum gas.
Phoenix registered a gross profit of P1.7 billion on the back of revenues of P21.9 billion in the period, leading to earnings before interest, taxes, depreciation and amortization of P503 million. Operating income and net loss stood at P179 million and P215 million, respectively.
“Compared to what has been reported by the industry, we generated an operating income and a positive EBITDA. Further, we are encouraged by positive results in April and May enough to suggest worst is behind us,” said Henry Albert Fadullon, the newly installed president of Phoenix.
LPG has proven to be a lifeline for Phoenix as residential demand for cooking fuel increased during the COVID lockdown. Volume increased by 39 percent on the back of double-digit growth in its core markets in the Visayas and Mindanao.
Phoenix said it also established a strong foothold in the mature market of Luzon.
Phoenix SUPER LPG expanded threefold since it bought the business in 2017.
Faudullon said the exponential growth was due to changing consumer behavior as people stayed at home during the pandemic.
He also attributed the increase in LPG business to their healthy inventory and to 95 percent of stores remaining open even during the quarantine period.
Phoenix said its retail network was prepared when the pandemic kicked in as the company has expanded its network two years ago, with 2019 being their best year with 126 new-to-industry stations.
Phoenix also upgraded 275 sites as part of an immediate-term program to refresh its network with a fresh, modern look. As of end-March this year, the company counts 660 retail stations nationwide and fuel retail volume increased by 9 percent thanks to the aggressive network expansion.
“We have successfully adapted to the norm of conducting business. We acknowledge that the challenges brought about by the pandemic will stay for a while, but we are working around it to continue delivering excellent service to our customers and shareholders,” said Fadullon.
The company placed several safety protocols that encourage healthy behavior in our sites such as wearing masks and personal protective equipment and physical distancing.
“We are thankful and proud, too, that our 1,800 employees and their families did not contract the virus and that they remain safe and healthy. We have also advised them that they can continue to work from home until the end of the year,” said Fadullon.
“By God’s grace and guidance and with full support from our employees and business partners, Phoenix is very confident that we will weather all the challenges,” he said.