PRYCE CORPORATION (PS:PPC) welcomed 2017 with a consolidated (unaudited) net income of PHP301.7 million for the first quarter, 53.6% higher than the PHP196.4 million registered in the same period of 2016. Similar growth was achieved in consolidated revenues which expanded by 52.3%.
A 22% increase in sales volume of liquefied petroleum gas (LPG) and the significant number of new LPG cylinders sold to households under the PryceGas brand of its subsidiary Pryce Gases, Inc. during the past year has once again propelled PPC’s revenues upward. YoY volume shot up 22.1% from 40,583 metric tons (MT) in 1Q 2016 to 49,560 MT this year. Revenues evidently grew faster than volume considering the rise in LPG contract prices (CP) from $ 408 per MT in December of 2016 to $477, $573, and $564 per MT in January, February, and March of 2017, respectively.
PPC’s LPG business delivered PHP2.08 billion in sales, contributing 94% to the consolidated revenues, which increased by 57% over the PHP1.32 billion sales of the same quarter from the previous year. The industrial gas products segment provided PHP102.3 million or a share of 4.6%, while sales from the group’s real estate and pharmaceuticals businesses contributed 1.15% and 0.33%, respectively. Hotel operations ceased to contribute to revenue starting this quarter in view of the closure of the Pryce Plaza Hotel on December 31, 2016.
Owing to the higher CP of LPG compared to same quarter of 2016, gross margin dipped to 23% from 25%. Operating expenses was controlled at 8.5% of revenues. These and the significant growth in LPG sales provided for the above-reported year-on- year net income growth of 53.6%.
As of the end of 2016, Pryce Gases, Inc. has overtaken a competitor to become the third biggest player nationwide in terms of market share according to figures from the Department of Energy. Management believes that similar growths in revenues and income can be achieved in the next quarters of 2017 on account of continued gains from infrastructure expansions begun the past two years, a determined effort to scale growth in the sales of LPG cylinders to new users, and, strong household consumption brought about by higher purchasing power.
May 2, 2017