050407: Petron profit down slightly to P953M in first quarter

By Donnabelle L. Gatdula
The Philippine Star 05/04/2007

Petron Corp. reported yesterday a net income of P953 million for the first quarter of 2007, slightly lower than the P1 billion earnings posted in the same period last year.

Petron president Khalid D. Al-Faddagh attributed the drop in earnings to the expiration of the income tax holiday on the company’s mixed xylene project last December.

The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA), however, grew nine percent to P2.43 billion from P2.23 billion a year ago.

The company official noted that the growth in operating income resulted from their continuing efficiency program.

The oil firm’s revenues declined 17 percent, reflecting lower average oil prices for the quarter as well as lower sales volume.

Domestic sales remained weak as local oil demand continued to contract, while the company’s export sales also declined due to unfavorable international prices particularly in January. Total volumes fell by 13.3 percent.

"We managed to maintain our resilient performance because of the initiatives that we have implemented over the years, including the application of the latest technologies at various points of our supply chain and our ability to introduce innovative products," Al-Faddagh said.

Some of these technologies include the distribution optimizer software which lowers transshipment costs and generates vessel schedules more efficiently, the point of sales system that automates processes at service stations, and offsites automation at the Bataan refinery which allows for better inventory management.

Despite the slight dip in net income, Petron remains optimistic on its prospects as the commissioning of its new refinery facilities approaches. The company’s $300-million petrochemical projects will begin coming on-stream in the first quarter of 2008, starting with the petro fluidized catalytic cracker (PetroFCC). Apart from producing the petrochemical propylene, the PetroFCC will enable the company to convert more black products into higher-value white products (LPG, gasoline, diesel, kerosene).

Petron continues to be the leader in a market that has become highly competitive — with many players vying for volume even as demand continues to decline.

In the retail trade, it has successfully maintained its hold at the top spot through strategic network expansion and continuing innovation in its product and service offerings.

To meet the growing demand for automotive LPG, for instance, the company has increased the number of stations with Xtend autogas refilling facilities to 16 from only seven at the end of 2006.

Petron has also recently launched a new product that is friendly not only to the environment but also to the fuel budgets of motorists. The new, re-formulated XCS Plus is the first gasoline in the world powered by an organic combustion enhancer.

Petron chairman and CEO Nicasio I. Alcantara said the launch of XCS Plus is part of a larger strategy to continually introduce advanced fuel formulations to the market.

"This is essential in protecting our market leadership at a time when we are facing many challenges such as rising crude prices and stiffer competition," Alcantara said.

 

http://www.philstar.com/philstar/NEWS200705040715.htm