Petron swings to profit in 2009, cites stable oil prices

Petron Corp. swung to profitability last year due to stabilizing crude and refined oil prices, the company said on Monday. In a statement, the country’s biggest oil refiner said it posted a net profit of P4.3 billion last year from a record loss of P3.9 billion in the prior year. Sales, however, slid by a third to P176.5 billion due to falling prices of petroleum products, the listed firm said. "Despite weak economic activity and cutthroat competition, we managed to turn around the financial performance of the company in 2009," Petron Chairman and Chief Executive Officer Ramon S. Ang said. "More importantly, we remained focused on our business initiatives and implemented several major projects that put us in a better position to sustain our growth momentum," he added. The year 2008 was abnormal for many oil refiners, which experienced extreme volatility in crude and finished product prices. Last year, Petron embarked on its largest retail network expansion program, opening 200 new service stations nationwide. As of last January, it had 1,463 fuel stations. "The company plans to continue its retail expansion program over the next few years to ensure its market dominance," it said. Petron said its retail expansion helped increase local sales last year, which reached 40.19 million barrels from 39.88 million barrels in the prior year. It said it kept its leadership in the oil industry with a 37% market share A major component of the company’s diversification program was completed in 2009 when it commissioned its Benzene, Toluene, and Xylene (BTX) facility, which can produce 22,800 metric tons (MT) of benzene and 150,000 MT of Toluene yearly. Petron also increased the capacity of its refinery to 220,000 MT of mixed xylene per year. These petrochemical feedstocks are used in a various industrial applications, including the manufacture of home appliances and machine housings. “While we are expecting these current programs to significantly contribute to Petron’s bottom line in the near term, we continue to look for ways to create more value for the company," Ang said. The company recently raised P10 billion with the sale of 100 million perpetual preferred shares. Much of the proceeds will fund the upgrade of the firm’s power generation system at its refinery in Bataan. "The planned upgrade will ensure a more reliable and economical power supply to the refinery and support further upgrade of its facilities," it added. — N.P. Aquino, GMANews.TV