PNX is engaged in the business of trading refined petroleum products, lubricants and other chemical products on a wholesale basis, operation of oil depots and storage facilities, and allied services mainly in Southern Philippines. Its products and services are distributed and marketed under the PHOENIX Fuels LifeTM trademark.
Phoenix Petroleum Philippines, Inc. (PNX) was originally incorporated on May 8, 2002 as Davao Oil Terminal Services Corporation and was registered with the Board of Investments in 2005 as a New Industry Participant with new investment in storage, marketing and distribution of petroleum products pursuant to the Downstream Oil Industry Deregulation Act of 1998.
The Company's operations are divided between trading, and terminaling and hauling services. Under trading, PNX offers its refined petroleum products and lubricants to retailers and commercial/industrial customers. The Company's terminaling and hauling services involve leasing of storage space in its terminal depot, and hauling and into-plane services, such as hauling of Jet A1 fuels to airports and refueling of aircraft, in Davao, Cagayan de Oro, General Santos City, Cotabato City, Ozamis City and Zamboanga City. Starting 2008, Cebu Pacific designated PNX as its exclusive logistics partner in these locations.
At present, PNX has five subsidiaries, namely, P-h-o-e-n-i-x Global Mercantile, Inc PFL Petroleum Management Inc., Phoenix Petroleum Industrial Park Corporation., Subic Petroleum Trading and Transport Phils., Inc., and PHOENIX Philippines Foundation, Inc.,
Income and Operations
PNX is the fourth largest importer among oil companies after Shell, Chevron and Petron. It has continuously expanded its network from 220 stations by the end of 2010 to 300 stations at the close of 2012. The Company increased its market share from 5.5% in 2011 to around 6% in 2012, excluding the LPG
and Export sectors.
Stocks Valuation
PNX recently enjoyed a modest surge in price after it announced issuance of cash and stock dividend. it currently trades around P10.50-P11.50 at 12xx PE.
Update: On March 11, 2013, PNX entered into a placing agreement to sell P130 million shares at P9.40 per share. The proceeds shall be used to pay debt obligations from expansion projects. A P.10 cash dividend were also declared payable on May 8, 2013.
PNX is a rising oil player that relies more on higher volume than expensive pricing. Their operations are heavily focused in Mindanao areas, as evidenced by the 191 stations in said area. It has also invested on oil tank vessels which should help lower its future expenses.
Why Get Cautious?
PNX heavily relies on bank loans to finance capital expenditure. Simple accounting tells us that a long term obligation has corresponding interest that could gradually reduce earnings. Also, PNX takes substantial risk from volatile fuel prices and global conditions.
Buffett Recommends...
Investing in Phoenix Petroleum means you are comfortable with the changing oil prices, whichever direction it may go. The increase in market share is a good indicator of how much volume it will record for the upcoming years, and getting paid stock and cash dividends can be a good entry point to start investing.
Please tell me where to buy PNX' stocks and how to accesss to it. Thanks
ReplyDeleteI recommend buying P10.5 or below. My projection is it may take off after they announce when they will pay the dividends they declared.
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