Petron Corporation remains the leader among petroleum companies in the Philippines, and has been profitable since 2021 after taking a big net loss in 2020 or the first year of the pandemic.

Petron reported a consolidated net income of P10.1 billion, or 51% higher than the P6.7 billion reported in 2022.

However, Petron recorded lower revenues in 2023 at P801 billion, slipping by 7% from the previous year’s P857.6 billion as global crude oil prices continued to correct from their record-high levels in 2022. The full year average price of benchmark Dubai crude stood at $82 per barrel in 2023, down 15% from $96 in 2022.

For the first six months of the current year, however, Petron delivered a 21% growth in consolidated revenues to P444.5 billion from last year’s P367 billion.

Furthermore, consolidated operating income rose by 8% to P17.3 billion during the first six months of the year compared to the same period in 2023.

Petron’s retail segment remained a key growth driver, posting posted a 10% increase, propelled by effective marketing programs in the company’s combined service station network of about 2,600 outlets in the Philippines and Malaysia. Sales to industrial accounts likewise jumped 9% mainly on higher jet fuel and liquefied petroleum gas (LPG) demand.

“Our prudent and strategic approach continues to pay off amid challenging economic conditions. Moreover, we were able to retain our edge in vital sectors and enjoy the trust of more and more customers. Our focus remains on strengthening the quality of our products and services while creating excellent value for our stakeholders,” said Petron President and CEO Ramon S. Ang.

TRADING AT LOWER PRICES DESPITE PROFITABILITY

However, despite reporting income increases from 2021 to the first half of this year, the shares of Petron listed at the Philippine Stock Exchange index (PSEi) has been more on a downtrend this year, which can make them a good prospect for bargain hunters.

Petron shares have been trading mostly at below P3 per share in the past weeks, while its highest close in the past 12 months was P3.55 on January 2, 2024.

And on October 26, 2023, Petron shares closed at P3.40 apiece. Meanwhile, Petron shares closed at P2.55 apiece last Friday (October 25, 2024).

This means that over the past 12 months or 52 weeks, the price of Petron shares went down by 26% despite the company sustaining profits.

Like many firms listed at the PSE, Petron will announce its third-quarter and nine-month revenue and consolidated income in November. And an increase in both Petron’s third-quarter and nine-month revenue and consolidated income might trigger a rebound in its shares listed at the PSE.

That is definitely worth waiting for, meaning Petron shares can no longer be ignored as these can be viable investments if they recover or rebound.

One good factor going for Petron and other petroleum companies is global crude oil prices are projected to stay below below $90 per barrel until November 2025, according to the US Energy Information Administration (EIA).

To recall, global crude oil prices went up to as high as $116 per barrel in mid-2022.

“We forecast average annual crude oil prices in 2024 and 2025 will remain near their 2023 average because we expect that global supply and demand for petroleum liquids will be relatively balanced over the next two years. We expect the Brent crude oil price will average $82 per barrel (b) in 2024 and $79/b in 2025, compared with its 2023 average of $82/b. We expect that the price of West Texas Intermediate (WTI) will be slightly lower but generally follow the same path,” the EIA said in its website.

(IMAGE FROM PETRON WEBSITE)