Shell Pilipinas delivers P0.8B Core Earnings as sales volume increase by 8%
May 11, 2023
Shell Pilipinas Corporation delivers P0.8B core earnings in the 1st quarter of 2023; sales volume increase by 8%.
Shell Pilipinas Corporation (“SPC”) continues to recover from the pandemic as it pursues its growth targets in 2023 despite various challenges such as oil price volatility, high inflation, and elevated interest rates.
The Company ended the first quarter with P0.8 billion in core earnings, 45% higher versus same period last year. This was driven by strong marketing delivery, as sales volume increased by 8% and premium product mix remains healthy. However, this was overshadowed by the P1.1 billion inventory holding loss arising from the decline in oil prices closing the quarter with a P0.3 billion net loss. Cash flow from operations excluding working capital movement stands at PhP1.4 billion.
“We create value for all our shareholders by growing our reach and impact, profitably. Guided by our Powering Progress strategy, we sustain our momentum of recovery quarter by quarter,” SPC President and Chief Executive Officer Lorelie Quiambao-Osial said. “We are pleased to report that growth in fuels and lubes sales volumes continued across businesses such as Mobility, Lubricants, and Aviation, while our Non-Fuel Retail business maintained its double-digit growth.”
Adapting to ever-changing needs
Our Mobility business achieved a volume growth of 8%, a strong first quarter performance for the B2C business while sustaining its high premium penetration of 27% across all sectors through its V-Power brand.
“The customers’ ever-changing needs always come first in our drive to innovate as we transform our stations into mobility destinations,” Quiambao-Osial said.
Seven new Mobility stations became operational in the first quarter. Selected new stations are sporting the Site of the Future design which further enhances the customer visit experience while reducing its carbon footprint, the latest of which is our new station in Banilad, Cebu.
Our Site of the Future mobility site in Silang, Cavite took home the 2022 National Association of Convenience Store Asian Awards on Sustainability and the 2022 Europa Award for Smart and Safer Mobility. Our Non-Fuel Retail business has inaugurated three Shell Cafés to date catering to the ever-evolving needs of our customers. They are conveniently located in Mobility outlets in Tagaytay City, South Luzon Tollway and in Cebu City.
Non-fuel retail plays a key part in our strategy and has sustained double-digit growth in the past three years. Shell Go+, our loyalty programme that was launched in 2021, reached its milestone of 2 million members helping us generate incremental value in both fuel and non-fuel offerings per store visit, compliments our almost 500 Shell Helix Oil Service shops.
On the move, safely
Commercial B2B business volumes improved by 8%, fueled by a volume growth of 48% for Aviation with the continued easing of travel restrictions and the opening of more flight routes, 18% for Marine with the increase in sea travel and transport of goods, and 2% for Lubricants with effective customer engagement programs and new customer wins.
In 2022, SHIFT moved to fully power its operations with renewable energy. This change, coupled with road transport optimizations reduced more than 90% of the Company’s carbon emissions. For the first quarter, the reduction of carbon emissions is equivalent to more than 2,000 trees. The energy company also stayed true to Shell’s Net-Zero Emissions by 2050 Goal, reducing 2.5 kilotons of CO2 for the first quarter by shifting to renewable energy sources, and by neutralizing carbon emissions through optimized road and primary transport scheduling.
“By improving the carbon off-set through our nature-based projects, we can provide our customers nationwide with a choice to drive carbon neutral.” Quiambao-Osial said. “Furthermore, our service stations are designed to lower carbon emissions as they use more eco-friendly equipment such as solar panels, LED lighting, inverter air conditioners, and even sustainable materials, like Eco bricks made from upcycled plastics,” SPC President and CEO added.
In keeping with Shell’s sustainability initiative, Fleet Solutions launched the Shell Reclaimed Card Program, enabling customers to recycle damaged or expired cards in exchange for carbon offset.
Progressing towards the Energy Transition
The Company changed its corporate name from Pilipinas Shell Petroleum Corporation to Shell Pilipinas Corporation marking the energy company’s vital role in the energy transition. This change signifies that SPC goes beyond petroleum and will deliver more options to its consumers to provide sustainable and cleaner energy solutions to the country.
“The change in name does not say that it is a departure from, but it just broadens where we are heading as a company to go beyond petroleum, but also recognizing that for us we keep looking at the needs of our customers now and in the future,” Quiambao-Osial said.
Shell Pilipinas Corporation Board of Directors lead the ceremonial ribbon cutting of the SPC wall that signifies the company’s name change from Pilipinas Shell Petroleum Corporation to Shell Pilipinas Corporation. (In photo: [Back, L-R] Mr. Fernando Zobel de Ayala, Mr. Luis La O, Mr. Rey Abilo; [Front, L-R] Mr. Amando Tetangco, Dr.Lydia Echauz, Chairman of the Board, Min Yih Tan, President and CEO, Lorelie Quiambao-Osial, Mr. Cesar Buenaventura, Ms. Nina Aguas, and Mr. Randolph Del Valle)
President and CEO of Shell Pilipinas Corporation, Lorelie Quiambao-Osial, talks about the history witnessed as PSPC transitions to becoming Shell Pilipinas Corporation and how this should align to the core values of the company.