Shell Pilipinas Corporation reported a 1,320% increase in net income for the first half of the year, reaching Php 1.7 billion, compared to Php 123 million recorded in the same period last year. 

In a report by Manila Bulletin, the company noted that its earnings could have been even higher if not for the impact of high interest rates and the depreciation of the Philippine peso against the US dollar.

Despite the strong performance in the first half, Shell’s net earnings for the second quarter declined to Php 340.4 million from Php 433.1 million in the same period last year, mainly due to the challenging high-interest rate environment.

SPC President and CEO Lorelie Quiambao-Osial stressed the company’s resilience and ability to deliver value in a challenging economic landscape, crediting the strategic momentum started in the fourth quarter of last year for the strong performance.

The firm also stressed the improvements in volume sales in its retail segment and effective cash management as key contributors to the earnings upturn. 

Additionally, Shell reported a positive free cash flow (FCF) of Php 1.1 billion, a significant improvement from the negative Php 7.5 billion recorded the previous year, due to active working capital management and controlled spending.

On top of that, the non-fuel retail segment saw an 18% increase in demand for lubricants and services compared to the same period last year.

The firm also said that there were gains from reducing its capital expenditures to Php 2.0 billion, focusing on high-yielding projects, which helped reduce the company’s gearing from 57%  to 54%. 

Cost-saving initiatives and supply chain efficiencies contributed to  operating expense savings and interest rate avoidance of Php 0.4 billion, nearing the company’s full-year goal of Php 0.5 billion.