050407: Petron's 1Q net income lower at P953M

By Paul Anthony A. Isla

Reporter

PUBLICLY listed Petron Corp. said Thursday it posted a net income of P953 million in the first quarter of the year, slightly lower than P1 billion a year earlier. The tax break Petron got for sales of Mixed Xylene last December has expired, cutting through its income base. Petron said its earnings before interest, taxes, depreciation, and amortization actually grew 9 percent to P2.43  billion from P2.23 billion in the same comparable period. Petron said the growth in operating income reflects the efficiency programs of the company. Revenues declined 17 percent, reflecting lower average oil prices for the quarter as well as lower sales volume. Domestic sales weakened as oil demand continued to contract. The company’s export sales also declined due to unfavorable international prices particularly in January, while 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,” said Petron president Khalid D. Al-Faddagh. Despite the income dip, Petron remains optimistic about its prospects as its new refinery facilities will soon be commissioned. Petron’s $300-million petrochemical projects are expected to come on-stream in the first quarter of 2008, starting with the Petro Fluidized Catalytic Cracker (PetroFCC). Apart from producing propylene, the PetroFCC will enable the company to convert more black products into higher-value white products, such as LPG, gasoline, diesel and kerosene. Petron continues to be the leader in a market that has become highly competitive—with many players vying for volume in the face of declining demand. In the retail trade, it has successfully maintained its hold on the top spot through strategic network expansion and continuing innovation in its product and service offerings. To meet the growing demand for automotive LPG, the company has increased the number of stations with Xtend autogas refilling facilities to 16 from only 7 at the end of 2006. Petron also launched a new, environment-friendly product that is also easy on the motorist’s budget. The new, reformulated XCS Plus is the first gasoline in the world powered by an organic combustion enhancer—the result of a two-year research and development process. “The launch of XCS Plus is part of a larger strategy to continually introduce advanced fuel formulations to the market,” Petron chairman and chief executive Nicasio I. Alcantara said. “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.”

 

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