Phoenix swings to profit in Q2

MANILA, Philippines — Listed independent oil firm Phoenix Petroleum Philippines Inc. recorded an all-time high sales volume in the second quarter, driving a turnaround in net earnings during the period.

In a disclosure to the Philippine Stock Exchange yesterday, Phoenix Petroleum said net income reached P132 million from April to June this year, a reversal of the P5 million net loss in the same period last year.

The company attributed the recovery to “its all-time-high quarterly volume, while maintaining prudence in operating expenses (OPEX) and capital expenditure (CAPEX) management.”

Sales volume jumped by 36 percent from P1.1 billion to P1.5 billion, pushing revenues to surge by 170 percent from P14.7 billion to P39.7 billion. At end-June, Phoenix’s station count stood at 680.

On a quarter-to quarter basis, Phoenix Petroleum said its overall volume grew 32 percent as the growth of the domestic business picks up pace.

Its domestic volume was driven by the stronger performance of the commercial and other B2B segments as select industries such as manufacturing and trading drive the momentum.

Sales of liquefied petroleum gas (LPG) also accelerated during the quarter on strong canister volume and as growth in industrial LPG. Overseas, the Vietnam LPG business led the growth.

However, Phoenix Petroleum said the recovery in retail has been slowed down by the continued challenges in mobility with the new spikes in COVID cases, the slower-than-expected roll out of the nationwide vaccination program, and the threat of new COVID variants.

“Our [second quarter] performance shows that our domestic growth is accelerating, and we are solidifying our market positions as evidenced by the recent market share expansion. Despite challenges, we are able to continue to expand our network via a capex-light model, win new B2B accounts, and keep our costs in line,” Phoenix Petroleum president Henry Albert Fadullon said in a statement.

He was referring to the growth in its market share from 7.1 percent in the first quarter last year to 7.8 percent in the same period this year, based on the latest market share data of the Department of Energy.

Meanwhile, the same report showed Phoenix LPG expanded its market share from 6.9 percent to 7.2 percent.

Phoenix Petroleum said it continues to deliver meaningful balance sheet initiatives with the continued debt reduction and successful refinancing of short-term liabilities, which have enhanced liquidity and lengthened the company’s debt maturity profile.

Last month, the company settled P3.08 billion in commercial papers, partly financed by internally generated funds. Cash generation improved through active working capital management and shorter cash cycles.

“We are confident in our path to long-term, sustainable growth, and will continue to implement high-impact activities to further strengthen the company’s fundamentals. We are encouraged and inspired to see progress over the past quarters with all the work the team has been putting in. With all these operational gains, we will probably see even more opportunities going forward,” Fadullon said.