Petron cancels dividends until return to profit

Petron Corp., the Philippines’ biggest oil refiner, said it won’t pay any dividends for 2008 after the company posted its first annual loss in eight-years because of volatile crude prices.

Manila-based Petron will resume dividend payments after it returns to profit as early as this year, President Eric Recto said in a telephone interview today. The refiner has been paying dividends since 2002.

Petron posted a 3.98 billion-peso (US$81.08 million) net loss last year, wider than the 1.5 billion to 2 billion-peso deficit Recto estimated in December, after price volatility in crude oil shrank margins. The refiner, which reported a 6.38 billion-peso profit in 2007, last incurred a loss in 2000.

“There are no plans to declare a dividend after last year’s losses,” said Recto, 45. “If oil prices remain more or less on these levels, it will help us capture the margins that should accrue to a refiner” and that will help the company return to profit this year, he said.

Crude oil in New York soared to a record US$147.27 a barrel in July, before tumbling 69% to close the year at US$44.60 as the global recession slashed fuel demand. Petron failed to capitalise on the raw material’s price slump because of the company’s policy of buying crude as much as two months before the refined product is actually sold, Recto said in December.

The refiner may sell debt to raise funds for expansion, he said today.

 

Category: ResourceAsia