Pilipinas Shell Petroleum Corp. (PSPC) remains confident of its prospects moving forward in the face of its decision to shut down its oil refinery.
PSPC is poised to save around $20 million in capital expenditure (capex), $20 million from operating expenses, and $190 million capital employed annually with its decision to shift to pure oil importing.
The company made this statement at its recent quarterly briefing where it outlined its first half results – it reported a loss of P6.74 billion, compared to a P3.73 billion profit last year, out of sales of P74.03 billion, down from last year’s P109.66 billion.
Stockbroker SB Equities said in an investors’ note Shell’s fundamentals continue to support its prospects, adding that as the economy improves, so will Shell’s business.
SB Equities said the compounded growth for motor vehicle registrations and petroleum product consumption meanwhile were at 10 percent and 4.5 percent, respectively.
“(Shell) also expects to benefit from the government’s aggressive infrastructure program and campaign against fuel smuggling,” SB Equities said.
The company’s decision to shift to pure oil marketing business meanwhile bodes well for Shell given that refinery EBITDA had been deteriorating since fiscal year 2018-2019, reflecting the decline in regional refining margins, SB Equities noted.