Petron Q1 net income down 56% as Middle East conflict dragged production

Petron Corp. posted a 56% decline in its net income for the first quarter of the year, as the conflict in the Middle East dragged production of the company’s refineries in the Philippines and Malaysia.

The Philippines’ only oil refiner opened the year with a P1.8-billion net income, down from P4 billion the past year, as operating income fell 36% to P6.1 billion while revenues rose 27% to P246 billion.

“Margins were squeezed by higher product costs during the period with the absence of refinery production in Malaysia and reduced output in the Philippines,” the company said in an emailed statement.

Petron reported a 7% drop in its sales volume for the quarter to 25.7 million barrels in the Philippines and Malaysia from 27.6 million a year ago due to lower production, due to the US-Israel conflict that curtailed crude and petroleum product flows from the Middle East.

“The geopolitcal developments in the Middle East have presented severe supply disruptions in our industry. As we work to manage its impact on our business, our main priority has been to secure adequate fuel supply and make sure we can continue to meet the demand,” Petron president and chief executive officer Ramon Ang said.

The company, which holds a 30% share of the Philippine market, in March confirmed the procurement of 2.48 million barrels of crude oil from Russia to augment its inventory until June.

“We know these are uncertain times, and we are committed to doing everything we can to sustain our operation and keep the economy moving,” Ang said.

“As the Philippines’ sole remaining oil refiner, we recognize our responsibility to help address the nation’s fuel challenges. Together, we will navigate this crisis and alleviate the concerns of our fellow countrymen,” he added.

The Philippines, a net importer of fuel, has been impacted by the conflict in the Middle East, prompting President Ferdinand “Bongbong” Marcos Jr. to declare a state of national energy emergency in March. —VAL, GMA News