Petron Corp. plans to restart its 180,000-barrel-per-day refinery in Bataan province next month amid optimism of a stronger financial performance this year.
“Unlike Shell, Petron is a modern refinery which we have upgraded only about five years ago. And the refinery is very competitive, and we see no reason for us to shut down the refinery,” Petron president and chief executive Ramon Ang said during the annual stockholders’ meeting held virtually.
“In fact we are set to restart the refinery this coming June. Unless there is a hard lockdown and the volume drops down tremendously, the refinery is a very viable business,” Ang said.
Petron owns the country’s lone oil refinery after rival Pilipinas Shell Petroleum Corp. shut down its 110,000-barrel-per-day facility in Batangas province last year amid the COVID-19 pandemic.
Petron also temporarily closed its refinery for economic and maintenance reasons starting February.
Ang expressed optimism about Petron’s financial performance after posting a net income of P1.73 billion in the first quarter, a reversal of its P4.9-billion net loss in the same period last year.
Petron attributed the recovery to the recent improvement in international oil prices and the implementation of cost-cutting measures.
“We certainly believe it will continue to deliver good performance unless there is a strict lockdown again,” Ang said.
Ang said the COVID-19 pandemic brought down the sales volume of Petron.
“Revenue-wise we are down practically 44 percent. And the volume drops by 27 percent. With that kind of number, no company can survive that. Luckily, Petron’s balance sheet is very strong, and we have prepared the company to be able to weather that kind of storm. So rest assured that the company will survive and will make good return for everyone,” he said.
Ang earlier said Petron was doing the best it could to create a safe and healthy work environment while ensuring that recovery stays on track.
“Petron is constantly evolving, and we will continue to work towards our goal of emerging stronger from this pandemic,” said Ang.
Data showed that Petron’s sales performance in the first three months continued to improve from the last three quarters of 2020, which reflected the demand destruction from the pandemic.
First-quarter volumes reached 19.38 million barrels, or 21 percent lower than 24.66 million barrels sold in the same quarter last year, while consolidated revenues declined 20 percent to P83.3 billion from P104.62 billion.
The company said that despite the lower revenues, it delivered a turnaround in the first quarter with a P3.7 billion operating income from the P4.4-billion operating loss in the same period last year.
“With the country’s vaccination program gaining more ground, we feel confident about our prospects and have, in fact, scheduled the resumption of our refining operations this June,” Ang said.
The company recorded inventory gains following the recent improvements in international oil prices in contrast with the inventory loss in the first quarter 2020.
Savings on operating expenses and financing costs also contributed to the sustained positive results. “We are banking on the success of vaccination efforts here and abroad to boost our economy and the downstream business environment in general. While we have our work cut out for us, we are inspired to do more, grow stronger, and contribute further to society,” said Ang.