Shell Pilipinas net income surged to P1.7B in 1st semester

Cost-saving measures allowed Shell Pilipinas Corp. to deliver P1.7 billion in profit in the first half, way higher than the P122.9 million recorded a year earlier.

In a filing to the local bourse on Wednesday, the oil giant said its net income had been pumped up by the company’s “successful implementation of cost-saving initiatives and supply chain efficiencies.”

This resulted in operating expense and interest savings of P400 million, nearly hitting its P500-million belt-tightening commitment for the full year.

Cost of sales, or the amount a company spent to produce goods or services, fell by 4.8 percent to P113.28 billion.

Gross profit also improved by 28.5 percent to P12 billion from a year ago.

Net sales, however, dipped by 2.4 percent to P125.35 billion due to lower marketing volumes.

Core earnings also ended almost flat at P1.43 billion in the January to June period.

Cash flow as measured by earnings before interest, taxes, depreciation and amortization also booked more than twofold increase to P6.86 billion from P3.33 billion.

“Our strong first-half performance underscores our resilience and ability to deliver value even in a challenging economic environment,” said Shell Pilipinas president and CEO Lorelie Quiambao-Osial.

New tack

“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,” Osial added.

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The mobility segment saw improvements in the second quarter, especially as its digital loyalty app Shell GO+ reached 2.5 million members.

Shell Pilipinas said its nonfuel retail business, meanwhile, posted 18 percent growth in the first half, propelled by stronger demand for lubricants and services.

For this year, Shell Pilipinas has earmarked P2 to P3 billion for its capital spending. The majority of the budget will be spent on new mobility stations as well as the enhancement of its supply and distribution network.

It ended 2023 with 1,179 mobility stations across the Philippines.