Basic Energy books massive hike in revenue, profit after P3B takeover of Filoil Energy in December 2021

Basic Energy (BSC) reported a hefty hike in revenue and profit after finalizing its acquisition of a 60 percent interest in Filoil Energy on 21 December 2021.

Ramon Villavicencio distances himself from Filoil Group which took over Basic Energy: He’s just chairman, not majority shareholder

BSC reported P109.8 million in profit on P3.745 billion revenue last year from a P63 million loss on P308,000 revenues in 2020.

In the first quarter of 2022, BSC recorded P161.6 million profit on P18.1 billion revenue versus a P19 million loss on zero revenue during the same period a year ago.

BSC paid P3 billion for 60 percent of Filoil Energy of the family of Ramon Villavicencio last December.

BSC’s takeover of Filoil would give it indirect interest in the oil firm’s joint venture with petroleum giant Total France – Filoil Logistics, Total Philippines (retail stations) and La Defense Filipinas Holdings (which manages fuel depots and terminals).

After beefing up the company’s operations, the BSC board chaired by Villavicencio is aiming to further streamline its operations which “includes plan to sell some of its stock investments to generate funds to finance future projects on alternative and renewable energy sources.”

BSC said its investment in Filoil “is part of the company’s plans to be a major renewable energy and power company.”
BSC’s auditor, Reyes Tacandong & Co. described the accounting of the takeover transaction as a “key audit matter due to its size and complexity.

Reyes Tacandong said the accounting required “significant judgments and estimates that are required to determine the values of the consideration transferred and the identification and measurement of the fair value of the assets acquired and liabilities assumed.”

Reyes Tacandong noted that part of Filoil properties absorbed by BSC in the takeover is a noncurrent asset worth P1.1.57 billion which has been up for sale since 2019.

Filoil has resumed negotiations for the sale of the assets with the recent easing of COVID restrictions.

“Based on the ongoing negotiation, the carrying amount of the investment is lower than the negotiated price of the transaction,” said Reyes Tacandong which also flagged the idle asset as a key audit matter.

BSC shares jumped nine percent to 43.5 centavos on May 30 on P15.25 million turnover after its released its financial statements.

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