Petron Corp., the country’s largest oil company, said Monday it has completed last week the sale of its P18-billion fixed-rate, peso-denominated bonds.
The amount is part of the oil firm’s P50-billion shelf registration with the Securities and Exchange Commission (SEC). The full amount will be offered to the public in tranches. The first issuance of P18 billion was concluded last October 5.
The P18-billion fixed rate bonds consist of P9 billion Series E bonds due 2025 and another P9 billion Series F bonds due 2027. BDO Capital & Investment Corp. was tapped as the sole issue manager.
“The company hereby notifies the Commission of the completion of the Offer on October 5,” Petron said.
Proceeds will be used to finance the company’s working capital requirements and debt payment.
Petron recorded a net income of P3.87 billion in the first half, a turnaround from the P14.24- billion net loss it suffered in the same period last year due to the pandemic.
Consolidated revenues of Petron’s Philippine and Malaysian operations for the first six months went up 14 percent to P174.13 billion from last year’s P152.36 billion despite lower sales volume.
Overall sales volume was 7 percent lower versus the same period last year as the market continues to reel from the impact of the pandemic. The slowdown in sales to industrial accounts was however partially offset by the gradual improvement in the retail segment.
Local sales in the service stations climbed by about 12 percent while volumes for lubes significantly improved by nearly 50 percent, reflecting the favorable performance of Petron’s products in the Philippines and Malaysia.
In April, Petron announced that it allotted P11 billion for its capital expenditure (capex) budget this year, higher than the last year’s P8.5 billion.
“The Company’s estimated consolidated capital expenditures for 2021 are about P11,048 million, primarily to fund ongoing capex projects,” Petron said in its final offering circular.
The company said, however, that the amount is just an estimate as projects are constantly being reviewed and the contracts entered into are subject to various factors. These include market conditions, the general state of the Philippine and Malaysian economies, the company’s operating performance and cash flow, and the company’s ability to obtain financing.
Over the past several years, Petron has made significant capital investments to maintain and upgrade the Petron Bataan Refinery, to expand its retail service station network in the Philippines, and to upgrade its service stations in Malaysia.
In 2018, 2019 and 2020, Petron’s capex stood at P10.42 billion, P19.8 billion and P8.5 billion, respectively, which primarily related to expenditures for refinery, depot and service stations. It has funded its capex with net cash flows provided by operating activities and debt or equity financing.