Mandaluyong–(PHStocks)–Petron Corp. (PSE: PCOR), the country’s largest oil refining and marketing company, has reported sales revenues of PhP274 billion in 2011, translating to a consolidated net income of PhP8.5 billion. This is slightly higher than the PhP7.9 billion posted in 2010 and was contributed by the rise in export sales and recovery of regional product cracks during the period.
Total industry demand in 2011 contracted by nearly 5% to about 294,000 barrels-per-day. This was mainly due to the reduction in fuel oil consumption by power plants amid high oil prices. Petron was able to mitigate the demand contraction and outperformed its two closest competitors. Petron’s sales volumes remained flat while its rivals suffered volume losses.
Petron remained the undisputed industry leader with nearly 38% of the total market. The company led in all major market segments including Retail, Industrial and LPG. Petron also passed its closest competitor, and for the first time, became No. 1 in the Lubricants segment.
“We have been able to sustain our growth momentum despite a year wherein we saw contraction in local sales due to higher product prices,” Petron Chairman and CEO Ramon S. Ang said. “While our core business remains robust, we are seeing more contributions from higher margin petrochemicals.”
“Seeing this potential, we have made a substantial investment at our Bataan refinery to produce more white products (LPG, gasoline, diesel) and scale up petrochemical production significantly,” Ang added.
In 2011, the ambitious Refinery Expansion Project (RMP-2), expected to cost $2 billion, was launched to optimize the company’s 180,000 barrel-per-day Bataan refinery. Aside from the increased volumes and conversion of fuel into higher value products, RMP-2 also helps ensure the country’s supply security since it will give Petron’s refinery the flexibility to “digest” a wider array of crude oil types from various supply points. RMP-2 is targeted for commercial operation by the second quarter of 2014.
The company is also expected to generate significant savings once the new power plant at the Bataan refinery is completed. The first phase will be onstream by early 2013 followed by the second phase at the end of the same year. Using the latest technologies, the co-generation plant has four Circulating Fluidized Bed boilers that can generate the nominal equivalent of up to 216MW.
Aside from these major capital projects that are expected to considerably enhance the bottom line, Petron has been aggressively expanding its retail network which at the end of 2011 stood at 1,900 – by far the most extensive in the local oil industry.
“We are very optimistic and confident of the company’s prospects moving forward. We have the right mix of initiatives that will ensure the company’s growth and profitability over the long-term,” Ang concluded.