MANILA, Philippines – Phoenix Petroleum Philippines Inc., an independent oil company, is issuing P1.5 billion worth of short-term commercial papers after earlier issuing P2 billion also in short-term papers.
Philippine Rating Services Corp. (PhilRatings), the local debt watcher, assigned an Issue Credit Rating of PRS 2 (minus) to Phoenix’ latest issuance.
“The total STCP amount rated by PhilRatings in relation to Phoenix Petroleum is now at P3.5 billion, having rated an earlier STCP issue amounting to P2 billion,” Philratings said.
According to Philratings, obligations rated PRS 2 exhibit above average capability for payment of both interest and principal.
“This is normally evidenced by many characteristics of a PRS 1 rating but to a lesser degree. Earning trends and coverage ratios, while sound, will be more subject to variations. Capitalization characteristics, while still appropriate, may be more affected by external conditions,” Philratings said.
The local debt watcher attributed the rating to the oil company’s ability to generate revenues among other factors.
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“Phoenix Petroleum’s business operations are able to generate substantial revenues, with profitability expected to improve going forward with its adequate liquidity and financial flexibility, and competent and experienced management team,” Philratings said.
The local credit rating agency also said that Phoenix’ network expansion would likely strengthen its position in the market.
Phoenix Petroleum is an independent oil company with a market share of four percent as of the first half of 2014.
As of Sept. 30, the company has a total network of 412 service stations, with 135 stations in Luzon, 56 in Visayas and 221 in Mindanao.
Net income, however, declined seven percent from the P541.3 million recorded for the same period a year ago on the back of weak oil prices.
The decline in volume, however, was tempered by increased efficiencies and savings particularly from more emphasis on sales to retail and commercial-direct-user customers in lieu of less profitable sales to distributors.
