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Consolidated Statements of Income

For the Years Ended December 31, 2014, and 2013

2014

2013
P482,638
463,100

Sales
Cost of Sales
Gross Profit

19,435

23,599

Sales and Administrative Expense


Interest Expense and Other Finance Charge
Interest Income
Share In Net Income/(Loss) of Associates
Other Income/ (Expenses) Net

(11,830)
(5,528)
844
102
790

Income before Income Tax


Income Tax Expense
Net Income

Incremental
P463,535
440,479

18,897 *
22,621 #

3,724 @
(11,475)
355 A
(5,462)
66 B
1285
441 C
110
8D
(675)
115 E

P15,622
P16,217
595
3,813
6,942
3,129
804
1,850
1,046 &
P3,009
P5,092
2,083 ^

Attributable to:
Equity holders of the parent company
NCI
(311)
P 3,009

P3,320
(155)
P5,092

Basic/ Diluted Earnings (Loss) Per Common


Share Attributable to Equity Holders of the
Parent Company
(P0.15)

P5,247
156

1,927

P2,083

P0.28

In 2014, Oil Industries experiencing a surplus of supply and a low of demand then the
company like Petron suffered of decreasing the oil price which is somehow a big challenge
not only for them but to all oil industries. Petron didnt consider this a burden and yet they
take this as an opportunities to continued growth and strengthen its business.
Legend:
* - There is an increase of Sales a totaled of P18 897 because of increase of revenue in
petroleum from P461 087 to 479 753 of which the reseller plays the biggest contribution.
Petron increased the sales volume by expanding hundreds of stations not only in Philippines
but internally.
# - Since Petron increases the sales volume which generates an increase of revenue and also
cost of sales. The Cost of Sales increases from 95% of Sales to 96% year 2014.
@ - A decrease of Gross profit from P23 159 to 19 435 having a percentage of 5% - 4% as of

Dec. 31, 2013 & 2014, respectively due to a low demand that declined of oil prices.
A - The Petron products had a sharp decline of oil prices and increased competition in year
2014. To look inward the focused of upgrading and innovation of facilities, adding plant,
additional installed point of sales (POS) terminals, improvement of stations and giving
awards arises. The total discrepancy of year 2014 and 2013 amounted to 355,000. Because of
so, the accounts are most affected were purchase services and utilities, Depreciation and
amortization and personnel expenses.
So, effect to the purchase services and utilities decreases from year 2014 and 2013
amounted to 2333,000 and 2,478,000 respectively with the amount of 145,000 discrepancies
because they need already employee to hire with not just purchasing of services. Depreciation
and amortization were also affected because of the additional equipments and plant of oil
from 3,178,000 to 3,379,000 having difference of 201,000 from year 2013 and 2014
respectively. Last most affected account was the personnel expenses, since there is an increase
of terminals and additional plant of oil need of people to give service to the production of
product so decrease in the selling and administrative. Then, from that the personnel expenses
had discrepancy of 85,000 from year 2013 and 2014.
B - Since the company decline their oil price therefore income of the company decreases.
Because of that, the interest expense of the company increases from the loan they got from the
bank. That ranges to 5,528,000 down to 5,462,000 pesos wherein the difference was 102,000.
C - Interest Income of the company decreases since they experienced a decline of oil price
and income. Which had a 441,000 pesos of decreases of year 2014 compare to 2013 interest
income, which are 844,000 and 1,285,000 respectively.
D - There is an decrease of sales between 2013 and 2014, in 2013 it has 110 while in 2014 it
has 102. So there has been a decrease of 8. It is because of the ownership of 35% and the
decreasing demand of oil prices in the second half of 2014, due to surplus of supply. The oil
price drop had ramifications on oil companies around the world, affecting the profitability.
E - There has been a decrease of other income (expenses) in 2013 and 2014, because as of
December 31 2013, the total outstanding notional amounts of currency forwards embedded in
non financial contracts amounted to $83million, while the 2014 is minimal.
There has been changes in fair value of financial assets at FPVL on 2014 there has been
(0.16%) and on 2013 (0.12%). For the years ended December 31,2013, 2014 and 2012 the
group recognized marked to market gains (losses) from free standing and embedded
derivatives amounting to 733, 2514, and (84s) respectively.
&- There is a low of Income Tax Expense around 56% since there is a decrease of income in
2014 and stated above the reason of declined in income.
^ - The percentage of Net Income to the Sales is only 0.62% in 2014 which decreases of 48%
from the Profit Margin year 2013.