Petron eyes P5-B net profit this yr.

Petron eyes P5-B net profit this yr.
By Donnabelle L. Gatdula
The Philippine Star 01/30/2006

Publicly-listed Petron Corp. expects to meet its P5 billion net income target for 2005, a ranking company official said over the weekend.

"We are on track. We are hopeful we can meet it," Petron chairman Nicasio Alcantara said.

As of end-September 2005, Petron – 40 percent-owned by the government through the Philippine National Oil Co. (PNOC) – posted a net income of P4.8 billion compared to P2.36 billion in the same period in 2004.

The company’s board will release the unaudited financial statement by end-February this year.

For 2006, Alcantara said they expect that income growth will be partially fueled by improved exports performance.

Last year, about 1/3 of Petron’s earnings were accounted for by exports. "We hope that exports will continue to drive growth for 2006," he said.

In the third quarter of 2005 alone, the oil firm’s export sales contributed P848 million or 34 percent of its income for the period.

In the first nine months of the year, export income contribution totaled P1.62 billion or more than a third of the company’s net income. Export volume also increased by 27 percent to 4.74 million barrels compared to 3.72 million barrels over the same period in 2004.

Petron president Khalid Al-Faddagh, in a separate interview, said the "outlook for 2006 would be better than 2005."

Aside from exports, he said another growth potential will be the company’s retail business particularly the company-owned and company-controlled (COCO) refilling stations.

Al-Faddagh said they hope to realize full gains from its $100 million Clean Air Act (CAA)-related modernization project which was completed this year.

Over the next three years, Petron has earmarked $300 million for additional refinery units allowing it to expand mixed xylene capacity and extract new petrochemical streams such as benzene, toluene, and propylene.

The investment will likewise optimize refinery operations through higher white product yields. The units are expected to go on stream at the beginning of 2008.

Petron continued to dominate the market – increasing its overall market share to 38.2 percent as of August 2005.

In the highly competitive retail market, the company continues to be the market leader with a share of 34.1 percent or a lead of 1.2 percent over its nearest competitor.

Petron has added 42 more outlets to its retail network since the start of the year. Its service station count of 1,246 remains the largest in the country.