Petron Q1 net income falls 56% to P1.8B on higher costs, output drop

LISTED oil giant Petron Corp. logged a 56% decline in its net income to P1.8 billion for the first quarter (Q1), as higher product costs and reduced refinery output, including the shutdown of its Malaysia facility and maintenance at its Bataan refinery, weighed on earnings.

For the first three months, revenues rose by 27% year on year to P246 billion, the company said in a statement on Tuesday, while operating income fell by 36% to P6.1 billion.

The company attributed the decline to higher product costs and reduced refinery output, including the continued shutdown of its Port Dickson Refinery in Malaysia after its product jetty was damaged by Tropical Storm Senyar in November last year.

Petron said it has activated its business continuity plan while repairs are ongoing.

Meanwhile, the Petron Bataan Refinery in Limay underwent scheduled maintenance during the quarter, further affecting production.

Excluding trading transactions from its Singapore operations, Petron reported a 7% decline in sales volume to 25.7 million barrels in the Philippines and Malaysia.

The company said it reduced fuel exports to support growth in its domestic retail and commercial segments.

Petron President and Chief Executive Officer Ramon S. Ang said geopolitical developments in the Middle East have disrupted supply in the industry.

“As we work to manage its impact on our business, our main priority has been to secure adequate fuel supply and make sure we can continue to meet demand,” he said.

Since late February, Dubai crude prices surged to as high as $129 per barrel in March, from $68 per barrel in the previous month. For the first quarter, Dubai crude averaged $86 per barrel, up 12% from a year earlier, the company said.

Amid rising prices and supply concerns, Petron said it sourced crude and finished products from suppliers outside the conflict-affected areas.

“As the Philippines’ sole remaining oil refiner, we recognize our responsibility to help address the nation’s fuel challenges,” Mr. Ang said. — Sheldeen Joy Talavera