SHELL Pilipinas Corp. swung to a core net loss of P1.9 billion in the first half (H1) and a reported net loss of P2.7 billion, compared to a profit of P965.3 million a year earlier, citing a difficult operating environment.
In a statement on Monday, the company said the reported net loss of P2.7 billion included inventory effects and one-off items.
It said the first-half performance was mainly affected by inventory holding losses, compressed margins as rapid increases in product costs outpaced domestic pricing adjustments and softer premium fuel demand.
Shell said, however, that it generated P2.4 billion in free cash flow during the period, maintaining liquidity and supply reliability through a volatile period for global energy markets.
“The first half tested the resilience of energy supply chains across the industry,” said Lorelie Quiambao Osial, president and CEO of Shell Pilipinas.
“Our priority was clear: keep fuel available, support our customers and trade partners, and help keep the Philippine economy moving,” she added.
“By leveraging our global trading and supply network and local infrastructure, we maintained reliable supply through one of the most volatile market environments in recent years.”
Shell said inventory holding losses reached approximately P1.0 billion as oil prices subsequently declined from earlier peaks, although this was partially offset by one-off gains of around P600 million from the sale of remaining crude inventory and related items.
The company ended the first half with a gearing ratio of 53 percent, reflecting the net loss and higher working-capital requirements needed to maintain supply and support customers during the disruption.
Commercial fuels volume grew by 4 percent, supported by increased demand from the power sector and reseller channel, while mobility volumes declined 4 percent as high pump prices affected consumer demand. Meanwhile, lubricants provided resilient earnings support.
Osial said Shell Pilipinas would focus on restoring profitability in the second half through disciplined cost and working-capital management, margin recovery, reliable supply execution and improved competitiveness.
“The actions we have taken position us to continue serving the country’s energy needs while creating long-term value for shareholders,” she added.
Shell Pilipinas shares on Monday shed P0.16, or 1.9 percent, to close at P8.24 each.
