Pilipinas Shell profit up 11% in 2019

MANILA, Philippines — Pilipinas Shell Petroleum Corp. (PSPC) managed to grow profits by 11 percent last year despite the tough environment for the oil sector.

In a disclosure, PSPC said it ended 2019 with a net income of P5.6 billion, an 11 percent rise from P5.1 billion in the previous year.

The company attributed the profit increase to strong marketing delivery and refinery cost savings which helped temper the suppressed regional refining margins and higher excise taxes that affected the oil industry.

PSPC said it spent P6 billion last year to expand its retail network, support refinery growth projects and enhance its supply and distribution capabilities.

“We will remain focused on strengthening our core businesses while being mindful of the evolving energy landscape. We will use our foundation of values and strong corporate governance as we continue to deliver on our strategy to make Pilipinas Shell a world-class investment case,” PSPC president and CEO Cesar Romero said. 

The oil firm’s retail segment recorded a 1.2 percent growth in sales volume despite higher excise taxes as  premium fuel penetration remained high at 27 percent.

“This growth was driven by targeted marketing activities coupled with loyalty programs and further expansion of our network,” vice president  for retail Randy del Valle said. 

PSPC ended the year with a retail network of 1,126 sites in key locations, adding 53 new stations in key areas across the country

Meanwhile, earnings of the company’s non-fuel retail business grew by 15 percent year-on-year. 

Last year, PSPC put up the first global pilot site in Cebu to further maximize real estate space in-stations as part of its global effort to further increase network efficiency and bring more offers to customers.

For the commercial segment, PSPC said lubricants, bitumen, aviation and commercial fuels all posted volume increases, contributing to the overall commercial volume growth of nine percent.

The company started operating its bitumen or asphalt production facility inside the Tabangao refinery in Batangas early last year, the only bitumen supplier in the country with local manufacturing capability.

The facility, which positioned the company to efficiently support the government’s Build Build Build program, enabled the bitumen business to more than double its operating profits in 2019, increase nationwide footprint, and export to five countries.