Petron 2009 profit seen at P4.2 billion

MANILA, Philippines - Oil refining giant Petron Corp. expects its 2009 net income to reach P4.2 billion, a turnaround from a record loss of P3.9 billion the previous year, chief financial officer Emmanuel Erana said yesterday.

In the nine months ending September last year, Petron reported a 21 percent growth in net income to P3.37 billion, from P2.78 billion the previous year period, as the company continued to benefit from improved prices of crude and low inventory levels.

Petron is raising up to P10 billion through a preferred share offering, involving 50 million shares with an oversubscription option of another 50 million shares.The final offer price, dividend rate and number of offer shares shall be known by Feb. 10.

Petron has slated its preferred share offering from February 15 to 26 while the listing of the shares has been tentatively scheduled on March 5.

The dividends on the preferred shares shall be set at a fixed rate of 9.3546 to 9.6046 percent per annum.

BDO Capital & Investment Corp., BPI Capital Corp. and ING Bank N.V. (Manila branch) were tapped as joint lead managers and bookrunners for the issue.

The preferred shares are non-voting and non-convertible, with a par value of P1, and are redeemable at the option of the company.

Proceeds from the preferred share issuance will be mainly used for capital expenditures for the company’s refinery operations and the expansion of its retail network.

Petron said it may also use proceeds to prepay short-term debt or invest in special savings or other short-term money market instruments. As of end-September 2009, the company had consolidated short-term debt of P45.6 billion.

Last May, Petron issued P10 billion worth of five-year and seven-year fixed-rate corporate notes. The issue, one of the largest corporate note issuances in the local debt market, was more than three times oversubscribed.

Petron is the market leader in the domestic oil industry with an overall market share of 36.4 percent. It has the biggest refining capacity, most extensive distribution network and most number of service stations. 

Petron has a refining capacity of 180,000 barrels per day and supplies nearly 40 percent of the country’s fuel requirements.