Oil refiner Petron Corp. said Tuesday it incurred a consolidated net loss of P14.2 billion in the first six months, a reversal of the P2.6-billion net income in the same period last year, as the company reeled from the impact of the coronavirus pandemic.
Petron said inventory losses reached nearly P15 billion in the first half because of the combined slump in demand, poor refining margins and collapse in prices.
“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 [capital expenditures],” Petron president and chief executive Ramon Ang said in a statement.
Consolidated revenues also fell 40 percent to P152.4 billion in the first half from P254.8 billion in the same period last year. Sales volume from Philippine and Malaysian operations went down 19 percent to 41.9 million barrels from 51.9 million barrels a year ago amid a sharp decline in fuel demand because of COVID-19’s impact.
Domestic sales volume fell 28 percent on reduced consumption, particularly in aviation and retail, with the implementation of stricter quarantine protocols in the country.
Petron has a combined refining capacity of 268,000 barrels per day and produces a full range of world-class fuels and petrochemicals.
It said 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.
Petron said 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. With the decline in oil consumption, refining margins also remained weak in the region.
Ang said he was optimistic of better figures in the second half as the economy slowly recovers.
“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,” said Ang.
Nearly all Petron service stations have re-opened or resumed normal operating hours given the more relaxed quarantine restrictions.
Petron assured the public that its service stations remain safe and COVID-free. The company owns around 2,800 service stations where it retails world-class gasoline and diesel.
It said that on top of already stringent standards, stricter safety protocols are now in place at its service stations to ensure that customers and personnel are protected from any threats of the virus.
“Expanding our safety protocols at our stations was something that we immediately did at the start of the pandemic. This includes temperature checks for our personnel, wearing of face masks, physical distancing, more frequent sanitation, and even promoting cashless payment. We also enforce even more rigid guidelines to reduce health risks and keep our facilities and communities safe,” Ang said.