Company aims to open 50 and 70 fuel service stations a year
With retail expansion cornering about a fifth of the budget as the company targets a “balanced network” in Luzon, Visayas and Mindanao by 2020, Pilipinas Shell Petroleum Corp. has decided to allot P4 billion a year as capital expenditure (capex) for the next three years.
Cesar G. Romero, Pilipinas Shell president and chief executive officer, said “At least for this year, $20-$25 million will go to retail, another $13 (million) will go to bitumen, and probably another $20-$25 (million) will go to the refinery.”
Ongoing maintenance and cost of some studies would be supported by the budget for refinery, while the balance would be allotted to general supply chain spending.
The company’s capital expenditure was more than P3 billion last year said Jose Jerome R. Pascual III, Pilipinas Shell chief financial officer. “We continue to generate a lot of cash flows so most of our capex programs are funded from internally generated cash,” he said.
The company’s objective is to put up between 50 and 70 fuel service stations a year, according to Mr. Romero. “Of course, it could be a little bit more, a little bit less, but that’s more or less the order of magnitude,” he said. “Last year, we built around 48, no embarrassment for being short on two. But we don’t play the numbers game we actually we want a very disciplined expansion, ensuring that the capital is deployed very efficiently.”
As for the future position of the company, the management is committed to an improvement in underlying performance of about P1-P2 billion per year.
Driven by retail sales volume growth, higher premium fuel penetration, and strong refinery performance, Pilipinas Shell’s earnings rose by 27% to P2.89 billion from P2.27 billion, in the first quarter of 2017.
The company declared a cash dividend of P1.65 per share in April, based on the second-half 2016 earnings. This resulted in a total payout of around P2.7 billion. Based on first-half 2016 audited results, P3.3 billion was paid as interim dividend in August last year. Source: Business World PWKD18052017
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