MANILA, Philippines — Pilipinas Shell Petroleum Corp. (PSPC) incurred a net loss of P16.2 billion in 2020 due to the closure of its refinery in Batangas and the drastic drop in oil prices.
In a disclosure to the Philippine Stock Exchange, PSPC said 73 percent or P12 billion of the net loss are one-off charges related to the cessation and transformation of its refinery in Tabangao into an import facility, while P4.8 billion is due to the drastic decline in crude prices.
The oil firm, however, was able to eke out a core net income of P0.4 billion by year-end, a strong rebound from end September’s P0.7 billion core net loss.
“Transforming the refinery into a world-class import terminal last August was a difficult but vital decision to make given the negative outlook for the refining sector worsened by the Covid-19 pandemic. A very hard decision for Pilipinas Shell but necessary to be more competitive and ratable in the future,” PSPC president and CEO Cesar Romero said.
With the transformation of the Tabangao refinery, Romero said the company was able to secure jobs for over 134 out of the 217 impacted refinery employees within other entities in the Shell companies in the Philippines while 26 opted for a voluntary retirement.
PSPC said it was also able to sustain its balance sheet strength despite the pandemic, reducing its gearing from 47 percent in the third quarter to 41 percent by year-end supported by its positive cash flow from operations.
The oil firm also exceeded its cash conservation targets, recording P3.9 billion in capital and operating expenditure savings, almost double its target of P2 billion for the year.
Despite mobility restrictions, PSPC opened 36 new sites nationwide, while the supply chain business started the operation of its third medium range-capable terminal in Subic.
With the lockdowns due to the coronavirus pandemic, PSPC reached its customers through digital platforms and offered home deliveries of food and other essentials.
It said fourth quarter marketing volume delivery saw a 30 percent increase versus the second quarter as mobility restrictions were relaxed, ending the year with total volume of 5.1 billion liters, 13 percent below last year’s pre-pandemic level.
“We are slowly seeing the results of our agility and decisiveness to thrive from the challenges posed by the global pandemic. We are confident about driving fuel mobility and getting the country back on track,” Romero said.