Phoenix Petroleum Philippines Inc. is firming up its road transport operations with a new subsidiary, and also in property holdings in which it will invest close to P5 billion in the near term.
The Davao-based firm, led by businessman Dennis Uy, will have these moves—first given the green light by its board of directors in the second half of 2019—approved by its stockholders in their annual meeting that will be held online on May 29.
Phoenix said in a regulatory filing it needs stockholders’ approval to form a wholly owned subsidiary for a road transport business, which will have an initial capital of P57 million.
Such company will absorb Phoenix’s existing operations related to road transport, in order for this to be efficient and to expand.
Also, Phoenix intends to invest P4.9 billion of corporate funds in its wholly owned subsidiary, Duta Inc., over a period of three years.
Duta, Phoenix’s property holding subsidiary, was acquired in 2017 for $6 million along with the $126-million liquefied petroleum gas business of Malaysia’s Petroliam Nasional Bhd here in the Philippines.
Phoenix has about 650 fuel stations nationwide and has in the past three years expanded to complementary and related businesses, such as LPG, asphalt, and convenience store retailing.
Phoenix has also been “aggressively widening” its network overseas through its subsidiaries based in Singapore—PNX Petroleum Singapore Pte. Ltd. and PNX Energy International Holdings Pte. Ltd.
For 2019, Phoenix reported a 46-percent slump in profit—pegged at P1.5 billon from P2.8 billion in 2018—as financing costs balloon.
Based on Phoenix’s audited full-year financial statement, interest expense on bank loans and borrowings almost doubled—up 96 percent—to P2.8 billion from P1.5 billion.
The latest figure is also more than thrice the P781 million recorded in 2017.