Petron Posts P14 Billion Net Loss in First Half of 2020 Due to Effects of COVID-19

Petron reported a 40-percent decline in its consolidated revenues for the first half of 2020, from P254.8 billion last year to P152.4 billion this year. The country’s largest oil refining company said sales volume in its Philippine and Malaysian operations also fell 19 percent to 41.9 million barrels to 51.9 million barrels.

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The drop was caused by slow demand due to quarantine restrictions and the effects of the coronavirus pandemic. This plus poor refining margins, and collapse in prices resulted in Petron’s consolidated net loss of P14.2 billion for the first six months of 2020 compare to its P2.6 billion net income in 2019. The company also suffered inventory losses of nearly P15 billion during the same period.

Philippine sales volume dropped 28 percent due to reduced consumption, particularly in aviation and retail, he company added. 

“We continue to improve our productivity and reduce our expenses to help the company cope with COVID-19’s impact,” Petron President and CEO Ramon Ang said in a disclosure with the Philippine Stock Exchange. “At the same time, we initiated cash preservation initiatives and prudently manage our CAPEX.”

Ang added that the company forecasts modest gains from inventory of about P3.5 billion in the second half of the year as prices start to recover.

“As the economy slowly reopens, we will need to find new ways to adapt to these new and unprecedented economic realities and remain resilient,” he said. “Just as we have survived many hardships in the past, we know we can rely on our strong corporate culture to pull us through this most challenging period.” 

Petron said that the worldwide lockdowns due to COVID-19 resulted in an “unprecedented demand destruction” which led to a sustained drop in oil prices, reaching record low levels in 26 years.

Dubai crude collapsed by almost 70 percent or $44/bbl (barrel of oil) from January to April, where oil price fell to as low as US$13/bbl in daily trading. As oil consumption declined, refining margins also remained weak in the region, Petron said.

Despite the grim figures, Petron said it continued to provide assistance to different sectors severely affected by the pandemic, including fuel subsidies to the Department of Transportation to help medical frontliners with free transport, and donations of personal protective equipment (PPEs) to COVID-19 referral hospitals through its Petron Value Card donation drives.