New business model calls for more ‘mobility’ sites, import terminals
By Angelica Y. Yang, Reporter
PILIPINAS Shell Petroleum Corp. is looking at investing up to P20 billion in the next five years to fund, among others, the construction of oil import terminals and more “mobility sites” as the listed company shifts to a new business model.
“P15 to P20 [billion] over the five-year period… In terms of investment, we are hoping that we will be able to continue with our investment profile of anywhere between P3 to P4 billion per year for the next five years,” Pilipinas Shell President and Chief Executive Officer Cesar G. Romero said in a media briefing on Wednesday.
He said the company plans to infuse funds in creating new mobility businesses, which are considered to be “very profitable.”
Pilipinas Shell said in a press release issued on Wednesday that it is shifting its retail business model from gas stations to mobility sites, which have more customer-centric offerings.
“Alliances with international and local brands, coupled with full vehicle servicing such as car wash and oil change lounges, will turn each mobility station into a one-stop community hub,” the company said.
The mobility sites, which will not only cater to cars and vehicles, aim to offer e-mobility to cyclists and pedestrian customers.
Mr. Romero was quoted as saying that the firm plans to open up 60 to 80 new mobility sites per year to reach its target of 1,500 sites by 2025.
In the media briefing, Mr. Romero said that “around 60% of the planned investment” will typically go to its new mobility sites.
According to Reynaldo P. Abilo, Pilipinas Shell’s director, treasurer, vice-president for finance and chief risk officer, said that the P20-billion investment over the next five years will also cover the construction of new import terminals.
“We will be funding [the investment] through our own cash-generated funds from our operations,” Mr. Abilo said during the media briefing. He added that the firm recently disclosed that it had around P60 billion in borrowing capacity or untapped credit lines.
Pilipinas Shell has three import terminals — in Subic, Batangas and Mindanao — and hopes to add two more in five years’ time, Mr. Romero said.
The oil company, the country’s second-largest in terms of market share, earlier reported a P16-billion net loss last year due to one-off charges that came with the transformation of its Batangas refinery as well as the global decline in crude oil prices.
Mr. Romero previously said that turning the refinery into an import facility was a “difficult but crucial decision given the negative outlook for the refining sector, which was worsened by the global health emergency.”
Shares of Pilipinas Shell in the local bourse improved 0.99% or 20 centavos to close at P20.50 each on Wednesday.