Petron posts 64% profit hike to P2.96 billion in first half

MANILA, Philippines - Petron Corp., the country’s largest oil refiner, posted a 64- percent increase in its net income to P2.96 billion in the first six months of 2010 from P1.8 billion in the same period in 2009.

In its disclosure to the Philippine Stock Exchange (PSE), the oil company said the higher earnings was brought about by the significant improvement in sales during the period.

“The significant improvement in the company’s bottom line was fueled by higher domestic sales and better margins from petrochemical feedstock, coupled with the reduction in interest expense and translation gains on dollar-denominated transaction,” it said.

Petron owns a 180,000-barrels per day refinery in Bataan, the biggest in the country. It is the largest oil refining and marketing company in the Philippines. Its Bataan refinery produces a full range of petroleum products to supply nearly 40 percent of the country’s total fuel requirements.

The oil industry leader is controlled by San Miguel Corp. Other stockholders include Ashmore Group, Petron Employees’ Retirement Plan and other minority shareholders.

In its report, Petron said earnings for the second quarter alone went up to P1.029 billion, a 10-percent increase from P934 million in the same period last year.

Petron’s revenues for the first half increased 50 percent to P115.35 billion from P76.67 billion due to higher average selling price per liter. Oil prices stood at P29.61 per liter this year from P21.97 per liter last year.

Sales volume jumped 12 percent for the period to 24 million barrels from 21.4 million barrels.

This was brought about by growth in diesel demand due to increased operations of independent power producers during the election period, combined with the effect of new service stations.

“Stable crude oil and finished product prices resulted in better margins this year compared to last year as most of the products sold came from expensive crude in 2008,” it said.

For the period under review, Petron’s total resources stood at P139 billion from P113.19 billion at the end of 2009.

The oil firm reported that it had allocated some P15 billion for its capital expenditure program this year.

Bulk of this, or P13.9 billion, had already been approved and includes the 70-megawatt power plant, service station and non-fuels business expansion, among others.