Shell ramps up capex to P6 billion

MANILA, Philippines — Pilipinas Shell Petroleum Corp. (PSPC) is ramping up its spending this year to P6 billion.

PSPC said this year’s capital budget would be used for the expansion plans of the retail business and optimization projects in the manufacturing and supply segmen.

This is higher than the P3.9-billion capital expenditures (capex) originally set for the period.

“These figures not only reflect Pilipinas Shell’s commitment to power the economy but also to remain as the Filipino people’s partner in nation-building through innovations and significant investments in the country,” the company said.

Last year, its capex reached its P4.1 billion target which was used for retail expansion and optimization of manufacturing and supply chains.

“We acknowledge the achievements of our people in delivering on our priorities, despite the challenging year. We celebrated our 105th year in the country and are committed to be the Philippines’ partner in nation-building for many more decades to come. Strong corporate governance, consistent strategy, and commitment to our core values give us the confidence to compete in a challenging business environment,” PSPC president and CEO Cesar Romero said.

PSPC ended the year with a net income of P5.1 billion, down 50 percent from 2017.

Despite aggressive competition and higher pump prices for the most part of 2018, the oil firm’s marketing businesses delivered robust earnings.

The manufacturing segment recorded highest reliability in five years, but contribution to the integrated business was impacted by the sudden drop in crude prices in the fourth quarter and depressed regional refining margins.

PSPC registered a 29 percent rise in sales to P218.87 billion.

However, cost and expenses ballooned by 34 percent to P210.38 billion while it incurred higher finance expenses of P1.25 billion.

PSPC was able to deliver P14.1 billion cash from operations, sufficient to cover its capital expenditure and dividend payments during the period.

 “Our strong cashflows have enabled us to deliver superior dividends to our investors since the IPO at levels that keep us among the highest dividend-yielding stocks listed in the Philippine Stock Exchange,” Romero said.