Phoenix Petroleum continues to exceed its pre-pandemic volume in the third quarter of 2021 despite stricter mobility restrictions for most of the period. Year-to-date revenues grew by 81% year-on-year as the sustained volume growth was compounded by sharply rising commodity prices and forex depreciation. Per unit OPEX declined 29% driven by continued efficiency improvements. As a result, operating income was up 78% year-on-year to P1.64 billion. Meanwhile, from a net loss of P95 million, the Company reversed to a net income of P170 million in the first nine months of 2021.
Year-to-date overall volume rose 33% from the prior year led by growth in the domestic B2B segment and the overseas trading business. Domestic volume increased by 29% as the Company expanded sales to B2B industries, and due to robust LPG demand. LPG grew 35% behind a steady growth in cylinder sales accelerated by the increasing contribution from the new canister business. Meanwhile, overseas volume increased 37% driven by growth in the trading business.
The retail business was set back in the third quarter by the re-imposition of stricter quarantine measures in major cities and provinces all over the country in August and September. With the acceleration in vaccinations nationwide, slowing COVID infections, and easing restrictions going into the fourth quarter, momentum is expected to further pick up. Station count in 3Q stood at 685.
“We are proud of the sustained growth in the third quarter. This is the product of the team’s hard work for the past 18 months as we position the business stronger during the pandemic, and aim for growth as the economy emerges from it. We have diversified our income streams with new B2B markets, a new station format – Phoenix Block – and a new SKU in our LPG portfolio. We likewise strengthened our digital presence with our own LIMITLESS app that, to date, has generated over P500 million in transaction value,” Phoenix Petroleum President Henry Albert R. Fadullon said.
In addition, the Company increased its market share in 2Q21 to 9.0% from 7.8% in 1Q. This brought its overall market share to 8.3% for the first half of 2021, based on the latest report from the Department of Energy.
The Company continues to progress on its deleveraging efforts with a lower overall debt level and declining leverage as of September 2021. Liquidity, meanwhile, has yet to be back to its optimal levels. “At the height of the pandemic, our just-in-time inventory strategy served us well by minimizing losses from rapidly falling prices, and slowdown in demand. In today’s upcycle environment, our gains are limited as reflected in the softer 3Q growth versus 2Q. But overall, it is net beneficial to us as it provides more stability and less volatility,” Fadullon said. He also expressed optimism for the next quarter saying, “As quarantine restrictions are eased, and more economic activity is expected during the holidays, we are looking forward to capping off the year with an even more vigorous business performance.”