Local firms making HUGE profits...

**theveed** · May 11th, 2006 06:47 PM

Hehe, lahat naman ng branded eh... nasa perception nalang ng buyer yan.. Do you really think a pair of Florsheims really cost that much to make? or a bottle of Coca Cola really costs that much more than Pop to produce? Or those beloved iPods really cost that much to make?

Pricing is based on demand... kung walang paki ang tao to pay more for a brand's image, then whose fault it is that a particular item is priced that much...

**niky** · May 11th, 2006 07:55 PM

BTW, that 3% should be taken in context... at a 0.50p increase, which is, say, 3% of the TOTAL price of gas, that 3% affects the overall margin (MAYBE between 5-25%) very very little. As for record profits, guess what? Thanks to higher than ever demand, sales of gas are through the roof... thus, record profits. The oil supply isn't growing as fast as demand, thus, rising retail prices. Econ101.

**jim** · May 11th, 2006 07:59 PM

ok lang na kumita sila ng malaki basta ayusin nila ang serbisyo nila. ang problema karamihan gusto tubong lugaw kaya nagiging kawawa tayong mga consumer.

**theveed** · May 11th, 2006 08:08 PM

Econ101

Apparently too many people in this planet hasn't taken this course or flunked it during HS and College.

**oldblue** · May 11th, 2006 10:18 PM

Originally Posted by mazdamazda

gross is in trillions? the article did that the gross sales is just around P190 billion.

btw, you are also not taking into considering liabilities... for 2004, petron's liabilities is around P40 billion. the P5 billion net income now seems like chump change compared to their liabilities.

yes liabilities are what they owe. but still imagine the cash on hand. liabilities payments can be delayed for the very reason that they are oil companies.

big companies don't operate like that.

on the record yes.

**oldblue** · May 11th, 2006 10:30 PM

Originally Posted by M54 Powered

the largest oil company in the world, ExxonMobil, also had it's best-EVER earnings quarter in 1Q 2006 after a similarly record breaking 2005. the 12 largest US oil companies are all reporting earnings windfalls as well (hooray for my mutual funds!

)

but i read an interesting article in Business Week - according to BW the 5-year average profit for oil and gas companies is only slightly above the average for all industries...bumabawi lang ba sila? more likely, as a couple of people have already said - the cost of exploration and extraction just to find a few million barrels is staggering...especially considering the fact that you strike black gold only a few times if you drill in a hundred places.

another interesting fact - in 2005, the average profit for oil/gas companies was only seventh highest among all industries. the highest?

#1 - pharmaceutical/biotech
#2 - banks
#3 - diversified financial services
#4 - software
#5 - telecom
#6 - food and beverage

these are US company figures. it would be interesting if somebody posted the figures for philippine companies...

i just think of it this way *m54_powered, businesses whether pharmaceutical, globe, smart, software, food require energy. hence, we can safely say that power companies have their "cut" on the gross sales of each company. each service/ product produced require energy (ewan ko na lang handicraft na ginagawa sa kubo lang with meralco/napocor submeter

). and san pa ba dependent power companies? syempre oil din.

simple as that lang naman. today, countries would go to war first bec. of oil, secondary na lang ang food and other basics.

**empy** · May 11th, 2006 10:47 PM

btw, if our company had a net income margin of only 3% we would all be fired :lol:

re: biotech....their business model is quite similar, actually. they spend billions of dollars in "exploration" - research to develop new drugs - and the overwhelming majority of their R&D ends up in failure. so whenever they get a winner that is actually approved by drug administrations globally, they have to charge ridiculous margins to make back their losses (and also take in a huge profit).

whether this is moral behavior or not, it's what the company's officers think they have to do to survive and/or win in the market. but it really looks bad sometimes when you have people dying of AIDS and not being able to afford a million dollar experimental cure....

**uls** · May 11th, 2006 11:31 PM

Originally Posted by theveed

Hehe, lahat naman ng branded eh... nasa perception nalang ng buyer yan.. Do you really think a pair of Florsheims really cost that much to make? or a bottle of Coca Cola really costs that much more than Pop to produce? Or those beloved iPods really cost that much to make?

Pricing is based on demand... kung walang paki ang tao to pay more for a brand's image, then whose fault it is that a particular item is priced that much...

Yes, indeed. That's business. A seller will price his product or service as high as the market can bear. No argument there.