Makati—(PHStocks)—Pilipinas Shell (PSE: SHLPH) more than doubled its net income, closing 2016 at ₱7.4 billion, up from ₱3.6 billion in 2015. The strong financial performance is driven by increased premium fuel penetration, strong retail volume growth, successful marketing campaigns and logistics cost savings that offset the impact of lower commercial sales volumes and extended refinery downtime in Q4.
Premium fuel penetration increased to 27% from 23% in 2015 buoyed by the continuing high preference of motorists for Shell-branded premium fuels. The growth of Pilipinas Shell’s retail network, which continues to be the nation’s most efficient in terms of throughput, underpins Pilipinas Shell’s ability to generate strong cash flows to fund its investment programs. Pilipinas Shell ended 2016 with 996 active retail sites.
Retail volumes grew at 4% from prior year. While Pilipinas Shell’s commercial business faced some challenges in the power sector, specific businesses such as Bitumen and Lubricants exhibited double-digit growth from 2015 to 2016.
Committed to developing smarter products, Shell Helix and Shell Advance delivered strong brand performance through innovative methods, marketing initiatives and cost management efforts that boosted the growth of Lubricants business. The increasing number of infrastructure projects in the country supported the growth of Bitumen business.
Pilipinas Shell’s gearing ratio further improved to 27% in 2016 from 37% in 2015 mainly due to early repayment of debts and higher earnings in 2016. Pilipinas Shell paid out an interim dividend based on 1st half 2016 results in August last year, amounting to ₱3.3 billion.
In January 2016, Pilipinas Shell started producing Euro-IV compliant fuels in line with its commitment to promote smarter mobility and smarter products in the country. Pursuing its nation building efforts by building smarter infrastructure, Pilipinas Shell’s North Mindanao Import Facility (NMIF) in Cagayan de Oro started operations in June 2016. It is considered a game changer for the company for it is positioned to deliver significant logistics cost savings.
Always aiming to meet current and future energy demands while contributing in creating a new energy future, Pilipinas Shell is committed to continuously grow its marketing business across the retail, commercial and non-fuel retail sectors, enabled by an efficient, safe and reliable manufacturing, supply and distribution chain and driven by strong corporate governance and world-class talent development.
In delivering its commitment, Pilipinas Shell will continue to focus on maximizing cash generation while optimizing shareholder returns; carrying out disciplined expansion and capital allocation; and generating attractive dividends of at least 75% of prior year audited net income.