Pilipinas Shell returns to profitability

MANILA, Philippines — Pilipinas Shell Petroleum Corp. (PSPC) reported a net income of P1 billion from January to March this year, a significant turnaround from the P5.5 billion net loss incurred in the same period last year.

The recovery was attributed to its new supply chain strategy, higher premium penetration across all segments and continued cash conservation measures.

PSPC said its cash flow from operations excluding movement in working capital stands at P3.9 billion, while its borrowings remain at a manageable level.

“We are now seeing the positive results of the tough decisions we made that ensured our financial resiliency and competitiveness brought about by the COVID-19 pandemic. The difficult decision to transform our refinery into world-class import facility allowed us to avoid the significant losses we incurred during the first half of 2020,” PSPC president and CEO Cesar Romero said in a statement.

“We have yet to see fuel demand to go back to pre-pandemic levels. With our refocused and reset strategy, we are well-positioned to meet the country’s energy requirement as the economy recovers from the pandemic,” he said.

PSPC said volume delivery remains below pre-COVID levels, as COVID cases increased and stricter quarantine measures in key cities nationwide resumed during the latter half of March.

The company’s first quarter total volume is down 31 percent as marketing volume fell 16 percent.

However, lubricants and bitumen sales went up 12 percent and 27 percent, respectively, due to new customer wins and increase in economic activities in some industries.

Last March, the company unveiled its five-year strategy plan ending 2025, banking on the transformation of its supply chain from manufacturing to full importation.

PSPC’s evolution of its retail business to mobility, and the move to lower carbon operations including pioneering the carbon offset offer in the country and providing low carbon products and services support Royal Dutch Shell’s target of being a net zero carbon emissions business by 2050.

In line with the strategy, mobility will open another “next-generation” site in Marilao, Bulacan that features more convenience options. The site also boasts sustainable features such as Lube Bay made out of eco-bricks and energy from solar panels. This is also the first site utilizing Bitumen FreshAir (BituFresh) for its pavements.

The company continued the expansion of its non-fuel retail network, ending the quarter with 152 Shell Select stores, 70 Deli2Gos, and 410 Shell Helix Oil Change and Service Centers.

“Our first quarter performance indicates that we are taking the right steps to deal with the COVID-19 pandemic. We will persevere and implement our bounce back plans sharply in a safe and reliable manner,” Romero said.

Apart from transforming its Tabangao refinery into a full-import facility, PSPC made a purposeful move to shift 100 percent of its Tabangao import facility’s energy requirements to renewable energy in partnership with Shell Energy Philippines (SEPH).  This will supplement the energy provided by the 5,220 solar panels installed onsite.

“We are moving forward in making our business more environmentally sustainable by reducing carbon use in our operations, and partnering with our customers to reduce theirs,” Romero said. e