Petron widens net loss to P14.2 billion

MANILA, Philippines — Petron Corp., the country’s largest oil refiner and marketer, widened its net loss as it continued to reel from the negative impact of the COVID-19 pandemic on global oil prices and demand.

In a statement, Petron said it registered a consolidated net loss of P14.2 billion in the first six months of the year as against the P2.6 billion net income it booked in the same period last year.

In the first quarter, the oil firm suffered a net loss of P4.9 billion.

The oil firm attributed the wider net loss to the combined slump in demand, poor refining margins, and collapse in prices.

During the period, the company suffered inventory losses of nearly P15 billion.

“We continue to improve our productivity and reduce our expenses to help the company cope with COVID-19’s impact. At the same time, we have initiated cash preservation initiatives and prudently manage our capex,” Petron president and chief executive officer Ramon Ang said in a statement.

Consolidated revenues amounted to P152.4 billion, down 40 percent as consolidated sales volume from its Philippine and Malaysian operations went down 19 percent to 41.9 million barrels amid a sharp decline in fuel demand because of COVID-19’s impact.

In particular, Philippine sales volume dropped 28 percent due to reduced consumption, especially in aviation and retail, with the implementation of stricter quarantine protocols in the country.

The worldwide lockdowns resulted in an unprecedented demand destruction which led to a sustained drop in oil prices, reaching record low levels in 26 years.

Dubai crude collapsed by almost 70 percent or $44 per barrel from January to April where  oil price fell to as low as $13 per barrel in the daily trading.

As oil consumption declined, refining margins also remained weak in the region.

However, Petron expects to see some improvement in the second half as crude prices begin to recover.

“The company forecasts modest gains from inventory of about P3.5 billion in the second half of the year as prices start to recover.

As the economy slowly reopens, we will need to find new ways to adapt to these new and unprecedented economic realities and remain resilient. Just as we have survived many hardships in the past, we know we can rely on our strong corporate culture to pull us through this most challenging period,” Ang said.