Shell Pilipinas Powers Ahead with P1.7 Billion Net Income in Q2 2024

Manila, Philippines – Shell Pilipinas Corporation (SPC) posted a net income of P1.7 billion for the first half of 2024, fueled by improved profitability from marketing businesses, better cash management, and inventory holding gains. This was slightly dampened by the high interest rate environment and Peso depreciation as the Peso weakened to a high of PHP58.9/USD in the second quarter.

For 110 years, SPC has been a trusted partner of Filipinos, consistently delivering high-quality products and world-class services to its customers. Even in the face of external challenges, the Company has solidified its high brand preference among Filipino customers.

“Our strong first-half performance underscores our resilience and ability to deliver value even in a challenging economic environment. Guided by our refreshed strategy, we’re exploring new ways to grow both volume and value that will enable us to provide attractive returns to our shareholders,” said SPC President and Chief Executive Officer Lorelie Quiambao-Osial.

A significant contributor to the company's bottom line was the successful implementation of cost-saving initiatives and supply chain efficiencies. This resulted in operating expense savings and interest rate avoidance of P0.4 billion, nearly reaching its P0.5 billion commitment for the full year.

The Company also realized high premium penetration in Mobility and increased premium products sales across its B2B segment, which helped temper the impact of the hypercompetitive industry during the first half of the year. This success is attributed to a series of targeted marketing campaigns and promotions, which attracted new customers while increasing the basket size of existing patrons.

The Company's financial health was further strengthened as it continued its active working capital management and controlled spending, delivering free cash flow (FCF) net of interest expense of positive P1.1 versus the prior year’s negative P7.5 billion. In addition, capital expenditures were strategically reduced by P2 billion versus the same period last year as the Company sharpened its focus on high-yielding projects. All these initiatives reduced gearing from 57% to 54%.

Championing Mobility Solutions

In the mobility segment, sales volume notably improved in the second quarter while maintaining high premium fuel penetration. Shell GO+, the company's digital loyalty app, achieved a milestone of 2.5 million members. This growth was further bolstered by a new campaign designed to drive higher volume penetration.

Non-fuel retail continues to experience double-digit growth as it posted an 18% increase compared to the first half of 2023, buoyed by an increased demand for lubricants and services, highlighted by the successful vehicle care launch for Shell Helix Oil Change+ and Shell Advance MotoCare Express, as well as expansion in convenience retail.

Shell Fleet Solutions, a global leader and trusted partner for 24 years in the Philippines, grew its accounts in the second quarter of 2024. By providing tailored solutions for fleets, Shell Fleet Solutions simplifies fleet management while supporting efficient business operations.

Commercial Resilience

Lubricants and Construction & Road delivered volume growth spurred by new customer acquisitions in major B2B sectors and doubling of lubricants e-commerce sales. Notably, volume from low-carbon products also grew in the first half with products such as Bitumen FreshAir, Instapave, and Shell Helix.

The Company remains dedicated to fostering innovation, and creating value for its customers, employees, and communities. The Company’s Q2 2024 performance highlights its role as a major player in the energy industry, poised to shape a cleaner and more sustainable energy future.

“Our strategy is paving the way for improved value delivery, and we are sustaining the momentum we started in Q4 last year.

As we continue to provide more and cleaner energy solutions for the Filipinos, we will Power Progress through our refreshed strategy, working on increasing shareholder value, boosting business resilience, and driving financial strength through strong earnings, cash and dividend paying position,” Quiambao-Osial said.