Pilipinas Shell incurs net loss of P13.9 billion

By Lenie Lectura November 11, 2020
https://businessmirror.com.ph/2020/11/11/pilipinas-shell-incurs-net-loss-of-p13-9-billion/

Pilipinas Shell Petroleum Corp. (Pilipinas Shell) reported Wednesday a net loss of P13.9 billion in January to September from a net income of P4.4 billion in the same period a year ago.

The oil company mainly blamed the weak performance on the P7.5-billion one-off charges in the third quarter.

Excluding these one-off charges relating to its Tabangao refinery transformation, its net loss should have been P6.4 billion.

The oil firm earlier announced the cessation of its manufacturing operations and conversion of its refinery into an import facility.

Pilipinas Shell suffered P5.7 billion in inventory losses, it said.

In the midst of the Covid-19 pandemic, the oil firm still posted savings of P2.5 billion by the end of the third quarter, exceeding its cash conservation target of P2 billion by year-end. Savings of P1.2 billion were generated from operating expense, with P1.3 billion from capital expenditure.

Pilipinas Shell said it remains optimistic as the country slowly relaxes quarantine restrictions.

“The wins are coming in gradually as more businesses operate at increased capacity in the areas of manufacturing and transportation, to name a few.

Our balance sheet, technical capability and resources are solid and serve us well in continuing to provide Filipinos with high-quality fuel products despite the challenging economic environment and to make the right sustainable decisions to protect the long-term interests of our shareholders,” said Cesar G. Romero, company president and CEO.

Pilipinas Shell’s 54ML-capacity terminal in Subic became operational last October to serve the demand of Northern Luzon, with the Tabangao Import Facility in Batangas serving Luzon and Northern Visayas, and the Northern Mindanao Import Facility in Cagayan De Oro serving the rest of the Visayas and Mindanao.

The company said it now has a more resilient network of three medium-range (MR) import terminals with sufficient finished products capacity to serve the demands of customers nationwide.

“The pandemic has forced us to rethink the way we do things, while ensuring the quality of service that Filipinos expect from us. Hence, we shifted our supply-chain strategy from manufacturing to full import-based operations to allow us to enhance our cost and supply-chain competitiveness, and leverage Shell’s portfolio of assets and highly competitive Global Products Trading Network.”

He added that the oil firm plans to re-invest at least P1 billion in the next few years to fully transform Tabangao into a world-class import facility that will support its marketing growth aspirations.

Pilipinas Shell continues to expand its retail network, with 1,135 sites nationwide to date.