Phoenix Petroleum profit declines 30% in 9 months

MANILA, Philippines — Phoenix Petroleum Philippines Inc. posted a 30 percent lower profit in the first nine months of the year amid higher costs from increased fuel premiums.

In a disclosure to the Philippine Stock Exchange, the Dennis Uy-led firm said its net income dropped to P918 million from P1.317 billion in the same period last year.

“Higher costs from increased fuel premiums weighed on the volume and margins, in particular of motor vehicle gas and fuel oil, resulting in a lower net income of P918 million,” the company said.

In contrast, revenues grew 13 percent to P73.17 billion from P64.97 billion in the same period a year ago.

“The company continued to face headwinds during the quarter as the passed-on impact of TRAIN I and II taxes put pressure on our competitiveness against the informal market. Hence, we support the government’s initiative in closing tax leakages through the fuel marking program that is being piloted,” Phoenix Petroleum chief operating officer Henry Albert Fadullon said.

“We look forward to its full implementation in February 2020 to redress such unfair practices. It is also imperative that we observe a more stringent enforcement of regulations governing bonded warehouses and a rigorous crackdown on non-compliant players to improve industry volume and tax collections,” he added.

Phoenix reported that its operating income grew 10 percent in the nine-month period to P2.74 billion.

It added that overall volume was 16 percent higher year-on-year.

“Volume derived from foreign operations, which consist of the Singapore and Vietnam businesses, grew 34 percent and accounted for 30 percent of total sales,” the company said.

Year-to-date LPG volume was up 20 percent, supported by the sustained growth in Visayas and Mindanao and rollout in Luzon.

The company said it continues to optimize its LPG value chain from its trading desk in PNX Singapore down to its marketing activities in high growth, underpenetrated markets such as the Philippines and Vietnam.  

Last September, Phoenix announced a partnership with Singapore-based Hengyi Industries International Pte. Ltd. (HYII) for an LPG offtake venture in Brunei.

“This is expected to improve the Philippines’ overall supply security as it shortens delivery time and diversify product source,” the company said.

It added that a cargo has already made its first voyage earlier in November.

Meanwhile, year-to-date aviation volume grew 11 percent, driven by new customer wins.

In addition to fuel, Phoenix also provides high-value services to airline companies including leasing of storage space, hauling and into-plane services. It is currently present in 18 airports, including fast- growing regional airports such as Davao, Cagayan de Oro, Iloilo and Cebu.

Moreover, Phoenix reported that retail growth accelerated by 22 percent in the nine-month period, driven by new station openings and regular retrofitting programs, which to date has been implemented in over 80 percent of its network.

The company has opened a total of 650 stations nationwide as of September 2019. 

In addition, non-fuel retail revenues were also up on higher total chain sales of FamilyMart, increased revenues from Posible, and additional rent income from retail locators. As of end September, FamilyMart has a network of 76 stores, with 18 more in various stages of planning and construction.

Phoenix reported that its commercial business saw a slowdown in the power segment due to lower dispatch of fuel oil-fired power for the most part of the third quarter, which dampened commercial volume growth to 11 percent. 

“We will continue to push into higher value segments, specifically retail, gas, and aviation services and improve consumer experiences by delivering our brand of service, relationship, and technology,” Fadullon said.