Petron posts 6.3% profit hike to P6.4B

Petron Corp., the country’s largest oil refiner, posted a 6.3 percent increase in its net income last year to P6.4 billion from the 2006 level of P6.02 billion.

In a disclosure to the Philippine Stock Exchange, Petron also said its operating income increased slightly to P9.91 billion from P9.73 billion in 2006.

The biggest oil company in the country attributed the favorable earnings performance to improved efficiencies in operations and a rise in domestic sales volume.

Petron likewise pointed out that it managed to boost its net income despite the expiration of the income tax income holiday for its mixed xylene project.

Sales revenues likewise went up from P210.52 billion to P211.73 billion last year. The oil firm’s domestic sales volume increased two percent to 41.81 million barrels from 41.06 million barrels. Overall, total sales volumes increased to 52.23 million barrels last year from 51.97 million the previous year.

“Despite a difficult business environment, we were able to focus on key initiatives to cement our market leadership and sustain our growth momentum,” Petron president Kamal M. Al-Yahya said.

Petron sustained its leadership with a 38.9-percent share of the market, further increasing its lead over its nearest competitor.

In 2007, the company launched two revolutionary products to add to its world-class product line. It introduced the enhanced XCS Plus, the first gasoline in the Philippines with organic combustion enhancers. The Sprint 4T, meanwhile, is specifically formulated for four-stroke motorcycles to provide optimum engine protection.

Aside from additions in its fuel product line, Petron’s market share was also boosted by its acquisition of Chevron’s retail LPG business. This significantly increased LPG sales by nearly 25 percent.

Last year, Petron also completed its PetroFCC unit at its 180,000 barrel-per-day refinery in Bataan. The PetroFCC is the first “cracking” unit of its kind in the world and has significantly improved operating efficiencies since it converts black products (fuel oil) to LPG, gasoline and diesel. It also enables the extraction of the petrochemical feedstock propylene.

The PetroFCC has a conversion capacity of 19,000 barrels per day while another facility, the PRU, will produce 140,000 metric tons of propylene annually. The two units were commissioned in February and March, respectively.

The PetroFCC and the PRU are core components of the company’s $300-million refinery master plan which also includes a BTX unit that would produce the aromatics benzene and toluene and increase mixed xylene production. The BTX unit is slated to be completed in the first quarter of 2009.

“The start-up of these units signals the beginning of Petron’s petrochemical age. We expect that our new petrochemical feedstocks will significantly contribute to our bottom line immediately,” Petron chairman and CEO Nicasio I. Alcantara said. “This also sets the stage for our further diversification into petrochemicals as we continue to pursue our strategic transformation program.”