Phoenix Petroleum returns to profit in Q3

MANILA, Philippines — Phoenix Petroleum Philippines Inc. has returned to profitability in the third quarter, driven by higher demand from both local and overseas markets.

In a statement, Phoenix said its net income reached P296 million a turnaround from the P5-million net loss in the previous quarter.

“The growth is attributed to the company’s relentless focus on cost discipline along with a more stable oil price environment,” the company said.

Phoenix registered a 42 percent increase in total volume in the third quarter compared to the same period last year as overseas demand almost tripled and domestic business recovered from the adverse impact of the COVID-19 pandemic that began in the second quarter.

Year-to-date overall volume was also 23 percent higher compared to 2019.

Overseas volume growth was led by subsidiary, PNX Petroleum Singapore, which is emerging as a strong regional player as it broadened its portfolio with liquefied petroleum gas (LPG) last year.

In addition, overseas LPG volume grew by eight percent from the previous quarter through its Vietnam unit as the country became one of the first to reopen its economy amid the pandemic.

“Leveraging on a supply partnership with Hengyi Industries, LPG Vietnam has grown its volume three-fold since Phoenix’s acquisition of the business last year,”the company said.

Meanwhile, domestic volume also rose by 14 percent quarter-on-quarter as community quarantine restrictions on travel and movement continue to ease nationwide.

Phoenix said retail led the recovery with a 36 percent sequential volume growth in the third quarter.

“Even with public transportation yet to be fully restored to normal, retail sales have already reached 80 percent of pre-COVID volume,” Phoenix said.

As of end-September, close to 100 percent of Phoenix’s  665 retail stations are under regular operations.

The oil firm emphasized that LPG now comprises 17 percent of Phoenix’s domestic volume, up from a 10 percent share in the same period last year.

Cylinder sales already exceeded pre-COVID levels, experiencing double-digit growth.

“The lockdown-resilient demand for LPG has been amply supported by competitive supply and sustained expansion of Phoenix’s Luzon distribution network and complemented by its strong foothold in Visayas and Mindanao,” Phoenix said.

Moreover, the company’s commercial business recorded relatively unchanged volumes from the previous quarter but continues to be sustained by the mining, fishing and power sectors, which were less affected by the strict enhanced community quarantine restrictions.

Operational expenses per liter was down 22 percent in the third quarter compared to the previous year. To date, close to P1 billion in cost savings and at least P1.5 billion in capital expenditure rationalization have been realized.

“Our mission to become an indispensable partner in the journey of our customers, employees and communities is more relevant than ever today as we navigate our way through the uncertainties together. With the support and confidence of our stakeholders, including creditors and suppliers, we will be able to return working capital and liquidity to optimal levels and accelerate growth,” said Phoenix president Henry Albert Fadullon.

“From fuel and convenience store retailing to business-to-business, we continue to strengthen our offer, deliver operational excellence in our execution, and deepen our focus on cash flows as we bring the company back to its path to profitability by year-end,” he said.