Petron (PCOR) Q2 2024 earnings summary

Executive summary

• Consolidated net income for 1H 2024 was P6.02B, down 2% year-over-year, as strong sales volume growth offset lower regional refining margins and higher financing costs.

• Sales volume rose 20% to 69.12 million barrels, with retail, commercial, and export segments all posting gains.

• Net sales increased 21% to P444.49B, driven by higher volumes, regional prices, and a weaker peso.

• Gross profit improved 8% to P25.57B, while operating income also rose, marginally covering higher interest expenses.

• Cash and cash equivalents increased 11% to P30.56B, mainly from operations, despite loan settlements and capital expenditures.

Financial highlights

• Net income for 1H 2024: P6.02B vs. P6.14B in 1H 2023 (-2%).

• Net sales: P444.49B, up 21% from P367.04B in 1H 2023.

• Gross profit: P25.57B (+8% YoY); operating income: P16.45B (+7% YoY).

• Interest expense and other financing charges: P10.23B (+16% YoY).

• Earnings per share (basic/diluted): P0.39 for 1H 2024 vs. P0.32 for 1H 2023.

Outlook and guidance

• Philippine GDP growth accelerated to 6.3% in 2Q 2024, supporting oil demand.

• Oil demand in the Philippines grew 6.6% in 1H 2023; normalization of economic activity and infrastructure projects are expected to sustain demand.

• Regulatory changes, such as higher biofuel blending and EPR Law, may impact operations and costs.