NOTE: All amounts expressed in millions, unless otherwise stated.
1. Total current assets divided by current liabilities
2. Total liabilities divided by tangible net worth
3. Net income divided by average total stockholders’ equity
4. Net income divided by average total assets
5. Total stockholders equity - (Common) divided by the total number of shares issued and outstanding
6. Net income after tax (net of Preferred Stock Dividend Allocation) divided by weighted average number of outstanding
7. Net income after tax (net of Preferred Stock allocation) divided by stockholders' equity-common
SOURCE: Department of Energy
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Comparable discussion on Material Changes in Results of Operations for the Year Ended December 31, 2019 vs. December 31, 2018.
RESULTS OF OPERATIONS
Revenues grew 10.4% to PhP 97.823 billion in 2019 on the back of the 19.8% growth in total volume sold at 3,259 million liters. This was augmented by the PhP 1.185 billion sales contributed by Philippine Family Mart CVS, Inc. (PFM) and PhP 113 million sales contributed by Action. Able, Inc. Average price of petroleum products were lower year-on-year as the implementation of the second round of increase in the excise tax rates of petroleum products under the Tax Reform for Acceleration and Inclusion (TRAIN) law starting January 2019 was more than offset by the 8.7% drop in the price of Dubai crude average. Such figure serves as the benchmark crude of Asian refineries, from USD 63.15/bbl to USD 69.13/bbl.
Cost of Sales and Services increased by 10.1% to PhP 86.811 billion, bringing Gross Profit higher by 12.7% to PhP 11.012 billion in 2019 from PhP 9.772 billion in 2018.
Selling and Administrative Expenses, or Operating Expenses (OPEX), were higher by 13.5% at PhP 6.514 billion. However, OPEX per unit liter improved to PhP 1.97 from PhP 2.11 as the Company continued to implement cost-effective programs to streamline its processes and reduce cost. As a result, Operating Income grew by 11.6% to PhP 4.498 billion in 2019 from PhP 4.030 billion in 2018.
Net Non-Operating Charges reached PhP 2.652 billion in 2019 versus PhP 0.656 billion in 2018. This was driven by the rise in average borrowing rates, as well as the additional debts incurred during the year to finance network expansion, including support systems and facilities. The Company also booked lower fair value gains on investment properties in 2019 at PhP 0.072 billion from PhP 0.625 billion in 2018.
Due to the abovementioned increase in Net Non-Operating Charges, Net Income Before Tax (NIBT) declined by 45.3% to PhP 1.846 billion in 2019 from PhP 3.374 billion in 2018. Net Income After Tax (NIAT) was subsequently lower by 46.2% at PhP 1.487 billion from PhP 2.767 billion in 2018.
Consolidated resources as of December 31, 2019 stood at PhP 86.950 billion, 34.5% higher than PhP 64.660 billion as of December 31, 2018. This was mainly due to the additions in property, plant, and equipment (PPE) related to the Company’s retail expansion, the recognition of the Right-of-Use Asset for the lease contracts with reference to PFRS 16 – Leases which took effect January 1, 2019, as well as increases in Receivable, Cash and Cash Equivalents, Prepayments and Deposits and Input VAT, in line with the overall growth in sales volume.
In relation to the increase in consolidated assets, total liabilities were higher by PhP 16.348 billion at PhP 65.035 billion, of which Interest-Bearing Loans and Borrowings, both current and non-current, increased by 25.1% to PhP 49.896 billion. This was mainly from the financing of PNX SG’s working capital requirements and the Group’s capital expenditures and partly offset by the settlement of debts. Meanwhile, Total Stockholders’ Equity increased to PhP 21.948 billion as of December 31, 2019, primarily from the issuance of PhP 7 billion PNX4 Preferred shares, net of the PhP 1.5 billion preferred shares redemption. Further contributing to the higher Stockholders’ Equity was the 14.0% growth in retained earnings coming from the PhP 1.486 billion net income realized in 2019, which was offset by the payment of dividends on both Common and Preferred shares, as well as the partial redemption of Preferred shares issued in prior years.
The Company’s key performance indicators and relevant ratios and how they are computed are listed below:
NOTES: Formulas are based on Philippine Accounting Standards
2 - Total liabilities divided by tangible net worth
3 - Interest Bearing Debts divided by Total stockholder’s equity
4 - Total stockholder’s equity (net of Preferred) divided by the total number of shares issued and outstanding
5 - Period or Year Net income after tax divided by weighted average number of outstanding common shares
These key indicators were chosen to provide management with a measure of the Group’s financial strength (Current Ratio and Debt to Equity) and the Group’s ability to maximize the value of its stockholders’ investment in the Group (Net Book Value Per Share and Earnings Per Share). Likewise, these ratios are used to compare the Group’s performance with similar companies.
For inquiries from analysts, the financial community, and institutional investors, contact Phoenix Petroleum Philippines, Inc. through: