PETRON Corp. projects a double-digit income growth by year-end, company chairman and chief executive Ramon S. Ang told reporters at the sidelines of the listed company’s annual stockholders’ meeting.
The Petron official declined to provide income details, although he said profit is going to be better than last year. In 2010, Petron posted a net income of P7.9 billion—an increase of 86 percent from P4.3 billion in 2009.
Ang said they are on track of the income projection for the second quarter. “I think we’re on track of our projections. But we can’t say if it’s going to better than the first quarter, due to the volatility of crude prices. When it drops we incur losses because of long inventories, but when it increases we cannot increase prices immediateIy. But I think it’s within our projections.”
Ang also noted that they are also getting a 30-percent boost in their income from the export of petrochemicals. “We’re earning more from the petrochemical business—particularly the export of polyethylene, propylene, benzene and xylene. The petrochemical side is the one giving us the upside,” Ang said.
In the next three years, Ang said a capital expenditure budget of $2 billion has been allotted to finance refinery expansion until 2014.The expansion project is expected to enhance the country’s supply security since it will give Petron more flexibility to “digest” a wider array of crude oil types.
As to when the secondary offering will be implemented to meet the 10-percent minimum public ownership requirement for listed company, Ang said there is no definite schedule yet as they are still studying when to undertake the new issuance. “We have yet to determine also the volume of shares to be floated, as it will still depend on the market’s appetite,” he said. Proceeds of the secondary offering will also be used to partly finance refinery expansion.
Ang said they have already invited a number of financial institutions to participate in the selection of its underwriter for the placement.
“We are in talks with some banks for a possible placement. We are supposed to disclose [this information] either today or tomorrow,” said Ang, adding that they have met with Standard Chartered, UBS, Goldman Sachs, ATR-Kim Eng and Security Bank representatives.
At present, more than 7 percent of Petron’s shares are listed at the local bourse, while San Miguel Corp. owns about 68 percent of the oil refiner.
In February, Petron commissioned its polypropylene (plant in Mariveles, Bataan. The said plant has the initial capacity to produce up to 160,000 metric tons of polypropylene annually.
Acquired in the middle of last year, Petron said the facility was rehabilitated and is now onstream. The company now expects higher margins derived from converting its propylene production from its Bataan refinery into polypropylene resin.
After the expansion program, Petron will be the only oil company capable of locally producing fuels that will meet the global clean air standard of Euro 5.
