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Phoenix Petroleum allots P1b for capex

Phoenix Petroleum Philippines is earmarking P1 billion in annual capital expenditures over the next few years from internally-generated cash for expansion program to boost growth.

“We will continue expanding our retail business by leveraging on our existing strategic partnerships such as the joint ventures, as well as monetizing our brands through franchising. Building on the momentum of LPG [liquefied petroleum gas], we will also continue focusing on our cylinders to reach more households nationwide,” Phoenix president and chief executive Henry Albert Fadullon said in a statement Monday.

Fadullon said the reimposition of community quarantine restrictions in March posed challenges to consumer demand anew, but first-quarter performance could be considered better than last year at the start of the COVID-19 pandemic.

Phoenix posted a net income of P63 million in 2020 on stronger financial performance in the fourth quarter and cost-cutting measures. The company posted a profit of P1.494 billion in 2019.

The company posted a P215-million net loss in the first quarter last year, compared to P415-net income in 2019 on impact of the COVID-19 pandemic.

Phoenix said it is gearing for growth and expansion in the long term by going into e-commerce and digital synergies that would capture up to 30 percent of revenues, thus enhancing its core petroleum business.

“Phoenix’s growth strategy remains focused on its core petroleum business, which includes fuels and LPG (liquefied petroleum gas), but this will be strongly supported and accelerated by our emerging digital and e-commerce channel, led by Limitless, which is our own app-based lifestyle rewards program,” said Fadullon.

Limitless users can earn points, claim rewards and access exclusive promotions and privileges with every transaction at accredited merchants of Phoenix, including affiliates in its group such as FamilyMart, Conti’s restaurant and Wendy’s fastfood burger chain.

The app provides a store finder directory and a location-based community interface that allows user groups to interact with each other. The app currently has over 119,000 users.

“Given the changing consumer landscape vis-a-vis our existing portfolio of brands and our over 18,000 retail touchpoints comprised of retail service stations, LPG retail outlets, FamilyMart stores and Posible retailers, we are identifying Limitless and e-commerce as our new pillar of growth that could drive close to 30 percent of our revenues in the future,” Fadullon said.

This will primarily be attained through the use of e-vouchers as the app’s main cashless currency.

“Over the next few years, from a lifestyle rewards program, Limitless will evolve into a revenue-generating digital platform that will complement our traditional B2B and brick- and-mortar B2C channels,” said Fadullon.

 

Topics: Phoenix Petroleum Philippines , capital expenditures , capex
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