Oil refiner Petron Corp. said Tuesday net income fell 72 percent in the first half to P2.6 billion from P9.5 billion in the same period last year as petroleum sales bore the impact of the Tax Reform for Acceleration and Inclusion law.
Petron said in a statement it still managed to book a net income in the six-month period because of the strong results in Malaysian operations and extensive savings on fixed costs by the group.
“These setbacks are just temporary and are all part of the business. We remain optimistic for the second half of the year given signs of modest recovery from gasoline and petrochemical margins recently seen in the market,” said Petron president and chief executive Ramon Ang.
The company said the first-semester results reflected modest gains amid the slump in regional refining margins that affected the Philippine operations by as much as P5 billion during the period.
Consolidated sales reached P254.8 billion from January to June, down 7 percent from the same period last year.
Petron’s Malaysian sales volume grew 4 percent, partially offsetting the decline in the Philippines following the implementation of the second tranche of the Train law.
The Train law brought total fuel taxes to an average of P6.75 per liter or equivalent to more than P15 billion in excise taxes in the first half. Petron said such developments “encouraged illegal business practices during the period.”
The company said, however, that it continued to pursue its network expansion program, completing 72 stations in the Philippines in the first half.
Petron also rolled out 24 new stations in Malaysia to reflect its growing market share.
Petron said it would resume normal operations at its 180,000-barrel-per-day Bataan refinery after completing scheduled repair works, including damages incurred during the April 22 earthquake that affected Central Luzon and Metro Manila.
Petron is the largest oil refining and marketing company in the Philippines and is a leading player in the Malaysian market. It has a combined refining capacity of 268,000 barrels per day and produces a full range of world-class fuels and petrochemicals. It has more than 3,000 service stations to date.