Petron chairman Jose Syjuco Jr. attributed his company’s strong performance to slightly improved margins, resulting from lower crude prices and a more stable peso exchange rate. The company reported a net loss of P1 billion for the whole of 2000.
He said as a result of these factors, the company’s gross margin improved to 10.3 percent from 3.3 percent during the same period last year. The Petron executive said while still below the 15-percent gross margin seen in more normal times, this improvement signals renewed financial health for the company.
The company’s return to a positive bottomline came amidst a 4.3-percent decline in its sales volume compared to the same period last year, reflecting a 10.7-percent drop in domestic sales and a slight loss in market share relative to the other local refiners.
Syjuco said the drop in domestic sales was partly driven by a strategy to increase exports that Petron started to implement in the last quarter 2000. But while margins on domestic sales languished, Syjuco said the company sought to shift some of its volumes to the more profitable export market.
He said its exports grew by 27.1 percent in the last quarter of 2000 and by 30.5 percent in the first quarter of this year.
"The loss of a small amount of domestic market share is part of a deliberate strategy to penetrate the export market, giving the company healthier margins than we can get from local sales," Syjuco said.
The export sales, he said, likewise insulate at least part of the company’s revenues from fluctuations in the peso dollar exchange rate.
Syjuco has expressed confidence that they would regain the top slot in the industry by the end of this year.
"As margins normalize in the domestic market, we are confident that with the inherent advantage, we have in terms of refining capacity and distribution network, we will regain the top market position," he said.  Donnabelle Gatdula