Following the announcement of the cessation of its manufacturing operations and conversion of Tabangao into a world-class import facility last August, Pilipinas Shell Petroleum Corporation (“Pilipinas Shell” ) booked P7.5 billion of one-off charges in Q3 bringing the total net loss to P13.9 billion at the end of September 2020.
Excluding these one-off charges relating to the Tabangao transformation, normalized earnings stand at a net loss of P6.4 billion, down from the P4.4 billion net income made in the same period last year but up from the P6.7 billion net loss reported at the end of the Q2 2020. Discounting the P5.7 billion in inventory valuation losses, core net loss has improved at P0.7 billion for Q3, up from Q2’s P0.9 billion.
Pilipinas Shell has boosted its efforts to maintain financial resilience in the midst of the Covid-19 pandemic by posting savings of P2.5 billion by the end of the third quarter (Q3), exceeding its cash conservation target of P2 billion by yearend. Savings of P1.2 billion were generated from OPEX, with P1.3 billion from CAPEX.
Slow but sure
Cesar G. Romero, President and Chief Executive Officer of Pilipinas Shell, remains optimistic. Government’s efforts to gradually reopen the economy by prudently relaxing quarantine restrictions are slowly giving elbow room for the economy to recover.
“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,” he says.
Gearing rose to 47 percent, mainly because of lower equity from net loss rather than an increase in net debt. Excluding the impact of Refinery one-off charges, the Company’s gearing stands at 41 percent.