Phoenix Petroleum posts 18.5% increase in operating income

MANILA, Philippines - Phoenix Petroleum Philippines Inc. said its net earnings from operations in 2009 reached P178.1 million, 18.5 percent higher than the P150.3 million earned in 2008.

In a disclosure to the Philippine Stock Exchange, Phoenix said it made an extraordinary gain of P573.4 million during the year arising from its March 2009 acquisition of Bacnotan Industrial Park Corp. (BIPC).

Phoenix said the one-time gain reflects the purchase of BIPC below its fair market value based on an independent appraisal which is required under prevailing accounting rules on business acquisitions.

On an aggregate basis, the company’s consolidated net income for the year stood at P751.5 million for a return on equity of 49.2 percent.

It noted that its core earnings per share for 2009 was 83 centavos per kilowatthour (kwh) based on weighted average shares (taking into account the 40-percent stock dividend declared in May 2009) as against 91 centavos per kwh in 2008.

The oil firm also reported consolidated revenues of P5.87 billion in 2009, an increase of 27.3 percent from P4.62 billion in 2008.

A substantial portion of this growth was brought about by the 81-percent increase in fuel sales volume during the year which offset the 40-percent average decrease in fuel selling prices from 2008.

It will be recalled that after reaching a historical peak in mid-2008, the international price of petroleum plunged to a third of its record high by early 2009 and for the rest of the year recovered to moderate levels that were 40 to 45 percent off the 2008 peak.

However, notwithstanding the lower price levels in 2009, the company managed to improve its gross profit margin from 9.1 percent 2008 to 11.8 percent last year.

The surge in fuel sales volume in 2009 (which followed growth of 42 percent and 61 percent in 2007 and 2008, respectively) was driven primarily by the company’s continuously expanding retail station network.

After ending 2007 with 32 stations, its network reached 86 and 120 stations at the close of 2008 and 2009, respectively.

Of these stations, 100 are based in VisMin and 20 are in Luzon with approximately 25 percent classified as company-owned and 75 percent being dealer-owned.

At the same time, sales to commercial accounts, primarily to the shipping, mining, power and transportation sectors, registered vigorous growth during the year.

The company expects to sustain its growth momentum into 2010-2011 with further investments in retail stations and depots in key trade areas.

It said accompanying this growth will be the expansion of its markets for lubricants and other automotive chemicals, as well as building on further the initial successes of its Phoenix Fuels Life brand awareness efforts.

The continuous investment in its retail and logistics infrastructure, plus the BIPC

acquisition, brought up the company’s total resources to P5 billion in 2009, up over 110 percent from 2008.