Shell Pilipinas Corp. looks to generate 6 percent more income this year than last year on the back of higher spending for fuel as the broad economy recovers.
Reynaldo Abilo, Shell Pilipinas treasurer, vice president for finance and chief risk officer, told reporters the projected income is driven by increased mobility, improved consumer spending and demand recovery the rest of the year.
“The Philippines remains an attractive market for Shell. We see gross domestic product (GDP) in 2023 of between 6 to 7 percent and a key driver of growth for the company,” Abilo said.
Abilo noted muted output performance in the opening months of the year due to high inflation “but looking at the remainder of the year, we expect to grow core earnings at least in line with the GDP growth of the country of between 6 to 7 percent.”
Last year, Shell Pilipinas booked a 6 percent improvement in net income of P4.1 billion from only P3.9 billion in 2021 attributed to strong marketing and to sustained high premium fuel penetration.
Abilo said Shell projects up to P6 billion as capital expenditures this year, not much higher than capex of only P5.6 billion last year.
Shell Pilipinas said the money will fund the opening of 40 to 60 gas stations, rehabilitate a few existing sites and finance the Darong, Davao del Sur import terminal seen completed next year.
“Based on projections, we will be able to internally fund our capex program, which means cash flow from operations enough to cover the P5 to P6 billion capex program,” Abilo said.
