Shell income jumps 39% to P10.4 billion

MANILA, Philippines — Pilipinas Shell Petroleum Corp. (PSPC) registered a 39 percent surge in net earnings last year on robust premium fuel sales and network growth, despite tight competition and the two-and-a-half-month preventive maintenance shutdown of its Tabangao refinery.

PSPC said it ended 2017 with a net income of P10.4 billion, up from P7.4 billion the previous year.

The company attributed the robust earnings to the strong retail volume growth enabled by continued network expansion and sustained uptake of Shell’s world-class V-Power fuels, strong regional refining margins and inventory holding gains.

“Pilipinas Shell delivered P10.4 billion in net income and generated P10.7 billion of cash from operations in 2017, 39 percent and 26 percent higher than the prior year. This is a testament to the company’s commitment and continuing focus towards robust cash generation at optimal returns,” PSPC president and CEO Cesar Romero said.

Retail sales volume grew four percent on the back of high premium fuel penetration at 27 percent. V-Power Diesel and V-Power Gasoline uptake grew by 17 percent and seven percent, respectively.

In terms retail expansion, the oil firm opened 66 new retail stations, closing the year with a total of 1,044 retail stations.

Meanwhile, PSPC’s non-fuels retail business expanded by 15 percent as convenience retail continues to enjoy high double-digit growth. It opened 37 Shell Select and 22 Deli2Go stores.

The retail lubricants business, on the other hand, also grew as 35 lube bays were opened last year.

At end-2017, PSPC has 102 Shell Select, 41 Deli2Go stores and 262 lube bays further boosting the non-fuels retail business.

Its commercial business also posted higher sales volume versus prior year, as the aviation segment saw volume growth after it started to supply aviation fuels at Mactan-Cebu International Airport, while winning deals throughout the year.

The completion of the preventive maintenance in the Tabangao refinery and freight optimization through the North Mindanao Import Facility (NMIF) further strengthened PSPC’s integrated supply chain.

The Tabangao refinery’s continued operations after the maintenance shutdown captured the strong refining margins in the region while the NMIF contributed savings of more than 50 percent above initial estimates.

Romero said the company is poised to sustain its commitment to high dividend payout at industry-leading dividend yield.

“We are proud to reward our shareholders with a P5.14 dividend per share. This represents a superior dividend yield of close to nine percent based on the share price at the time of our dividend announcement, making PSPC one of the highest dividend yielding stocks listed on the PSE. We see this as an attestation of our drive and aspiration to be valued as a world-class, and strategic long-term investment opportunity,” he said.