Shell Pilipinas Sustains Strong Performance with P2.2b Core Earnings

Manila, Philippines - Despite a high-interest rate environment and volatile global fuel prices, Shell Pilipinas Corporation (SPC) delivered a 40% increase in core earnings driven by opex savings and high premium penetration across businesses. SPC’s President and Chief Executive Officer (CEO) stated that “As we implement better ways to drive profitability, our discipline and focus are enabling us to compete in a growing but highly-competitive market.”

Balancing Volume and Value

By leveraging on its strong brand and global technological expertise for making reliable, high-quality products, the company has enjoyed increasing premium penetration enabling SPC to achieve value growth. Cost saving initiatives and supply chain efficiencies resulted in operating expense savings and interest rate avoidance of P0.8b, surpassing the Company’s P0.5b commitment. SPC delivered net income of P1.0b, tempered by inventory holding losses as global oil prices fall and a one-off impact of the company’s network portfolio high grading. SPC’s cash position continues to recover from previous years with cash flow from operations reported at P4.8b.

Mobility

Fleet Solutions and Commercial Road Transport, businesses under Mobility that serve medium to heavy vehicles, grew its customer base in the 3rd quarter resulting in volume growth of 7%. The Non-Fuel Retail segment boasts 17% operating income growth, maintaining its double-digit trajectory. Shell’s upgraded nationwide network of Shell Helix Oil Change+ and Shell Advance MotoCare Express facilities coupled with more Shell Café stores contributed to topline sales.

Commercial

The commercial business gained new customers while increasing its premium product penetration. Lubricants grew volume by 5% while Construction and Road delivered a 16% volume increase against last year’s delivery as it won new road paving projects using its road surface solutions – Shell Instapave and Bitumen FreshAir. Both products contribute to the environment through reduction of harmful emissions.

Staying On Target

As Shell Pilipinas Corporation celebrates its 110th year in the country it was awarded by the Institute for Corporate Directors its second two-arrow recognition from The Golden Arrow Awards for excellence in corporate governance. The ASEAN Corporate Governance Scorecard measures the performance of the companies in the areas of facilitating the rights and the equitable treatment of shareholders, how they relate to their different stakeholders, ensuring transparency and accountability through timely disclosure of material information.

Despite the challenging economic environment, Osial reaffirms with SPC’s stakeholders, "Our strong year-to-date performance underscores our ability to deliver value even in a challenging economic environment. We will defend & grow both volume and value leveraging on our integrated business that will enable us to provide attractive returns to our shareholders. As we move forward and the external environment evolves, we will be adaptive with our strategy."