MANILA - Petron Corp., the country's largest oil refiner, reported a double-digit decline in profits for the first half of the year due to lower sales volume and a difficult business environment.

The company posted a net income of P1.81 billion as of end-June, a 22% decline from the P2.32 billion recorded in the same period in 2008.

Despite the drop in profits, Petron Chairman and Chief Executive Officer Ramon Ang expressed optimism that the company would continue to recover from its P3.9-billion net loss last year.

According to Ang, Petron continues to lead the industry in the first half with a market share of 46.3%, with more than 1,300 service stations nationwide.

"We are confident that we can continue to improve on our performance over the next few months with the initiatives we have introduced. These initiatives are aimed at giving Petron new revenue streams while enhancing its leadership position in the industry," Ang said.

Petron has been aggressively pursuing expansion programs since its management was taken over by San Miguel Corp. early this year. In May, the company said it would be investing P450 million to put up small retail stations in the next 12 months to "prevent small oil players from eating up its market share."

Specifically, Petron said it plans to establish small stations in the provinces since Metro Manila is already saturated. Another 200 outlets, mostly dealer-owned, will be part of the 1,000 stations the company plans to put up in the next 3 years.

In the second quarter, Petron has also started the commercial operation of a Benzene, Toluene, and Xylene (BTX) unit at its 180,000 barrel-per-day refinery in Bataan province. The BTX unit can produce 22,800 MT of Benzene and 150,000 MT of Toluene per year.

The company has also raised the refinery's capacity to produce mixed Xylene by 220,000 MT per year. Benzene, Toluene, and mixed Xylene are raw materials used in making home electrical goods, food containers, machine housing, and solvents, among others.

"The BTX unit will allow us to capture more revenue streams at a time when refining margins are weak. As demand picks up, we expect prices of petrochemicals to improve and substantially contribute to our bottom line," Ang said.

At present, Petron's 180,000 barrel-per-day refinery produces a full range of petroleum products, supplying about 40% of the country's total fuel requirements.