Petron Corporation ($PCOR)

We will rise for the national anthem and remain standing for the invocation to be led by Ms. Janeane Tabuzo.

[Foreign Language] Heavenly Father, today we gather in gratitude for the 2026 Petron Annual Stockholders' Meeting. We thank you for guiding us through a fruitful year for Petron and blessing us with the wisdom and resilience needed to meet our goals and make a positive impact wherever we can. May you continue to bless the company, our officers, employees, stockholders, communities and all our partners. That we may continue to fulfill our duties and bring greater glory to your name. We humbly ask for strength in navigating countless challenges in the face of adversity. It is only through your grace and generosity that we are able to carry through in service to our people, our stockholders, and the entire nation. Help us stand firm on our values and intentions that we may work towards an even stronger Petron. All this we pray in Jesus' most precious name. Amen.

Please be seated.

Good afternoon, ladies and gentlemen. Meeting will come to order. Were notices to the stockholders duly sent?

Yes, Mr. Chairman.

Do we have a quorum?

Yes, Mr. Chairman, we have a quorum. There are present at this meeting, in person, by attendance advice e-mailed to Petron, and by proxy, about 72% of the total outstanding capital stock of the company. For the record, the Chairman of this meeting, Mr. Ramon S. Ang, holds proxies for 71.96% of the outstanding common and preferred shares of Petron, and he is voting in favor of all the corporate actions in the agenda or in accordance with the validated proxies. Mr. Chairman, we acknowledge the attendance of our Directors. And nominees for Directors are shown on the screen. We likewise acknowledge the presence of our Directors who joined us in person. And finally, we also acknowledge the attendance of the company's executive officers and R.G. Manabat & Company/KPMG, the external auditor of Petron for 2025. We advise the stockholders that after the management report, questions and comments e-mailed in advance and those sent through the live stream chat box will be read and addressed. Please identify yourself in your e-mail or chat with your name and address. Priority will be given to questions e-mailed or given in advance.

The full agenda of this meeting is presented on the screen.

The rationale and brief explanation of each agenda item can be found in the Definitive Info Statement for this meeting. Voting shall be made in accordance with the procedures set forth in this document, which appears in the company website in the PSE EDGE, and the summary of which is presented on the screen for reference.

The next item on the agenda is the approval of the minutes of the last AGM held on May 2, 2025, a copy of which is available for viewing in the Petron website.

Mr. Chairman, I move that the minutes of the Annual Stockholders' Meeting held on May 2, 2025, be approved.

I second the motion.

Moved and seconded. Next item on the agenda is the presentation of the management report for 2025. The report will be delivered by Manny Erana.

Thank you, Mr. Chairman. Good afternoon, ladies and gentlemen. Thank you for joining us for the 2026 Petron Annual Stockholders' Meeting. We will present our full year 2025 performance along with the results of the first quarter of 2026. 2025 was characterized by an oversupply of oil amid persistent geopolitical tensions. Dubai crude hit a full year average of USD 69 per barrel, 13% lower than 2024's USD 80. Prices of finished products mirrored the trend in crude oil prices. Petron carefully navigated this challenging business environment. In 2025, we recorded our highest net income to date of PHP 15.6 billion, up 84% from 2024. This performance was driven by sustained domestic volume growth, enhanced refining productivity and effective cost and working capital management. Our total volumes reached close to 138 million barrels, slightly below the previous year, but selling more in the retail and industrial segments. With our marketing segment performing at its best, we captured about 30% of the nation's total petroleum demand. We have also maintained our leadership in the LPG market. While our revenues for 2025 fell 7% to PHP 810 billion due to lower international prices, operating income stood at PHP 37.3 billion, 28% higher than 2024. As we strengthened our market leadership, we maintained efficient and reliable management of our facilities in the country. The Petron Bataan refinery achieved its highest crude utilization since the pandemic. We improved our refining efficiency and recovery of higher-value products like gasoline, diesel and jet fuel. Our storage and distribution network met the demand despite logistical challenges. Our international operations remained resilient, allowing us to reach more markets and connect with global industry players. Petron Malaysia, like the Philippines, focused on process optimization, strategic expansion and long-term sustainability. Volumes remained steady despite domestic demand adjusting to changes in their fuel subsidy program. Our subsidiary, Petron Singapore Trading, celebrated its 15th anniversary as a reliable partner in oil trading. Alongside our success, we remain dedicated to uplifting our communities while strengthening our sustainability commitment. Through long-standing initiatives like the Tulong Aral ng Petron scholarship and Puno ng Buhay reforestation program, we continued the expansion of our CSR efforts. We've also enhanced environmental and energy conservation initiatives throughout our operation, ensuring that we meet our ESG targets. The start of 2026 brought unprecedented challenges as the conflict between Iran with the U.S. and Israel resulted in a full-on war. This caused significant supply disruptions and volatile price fluctuations. Against this backdrop, our revenue rose 27% to PHP 246 billion in the first quarter because of higher international prices experienced in March. Excluding trading volumes from Singapore, we recorded consolidated volumes of 25.7 million barrels in the Philippines and Malaysia, 7% lower than our previous year, mostly due to the lower export from Malaysia due to the refinery shutdown. We reported a net income of PHP 1.78 billion in the first quarter of 2026 despite this very volatile price and supply situation in March. Ensuring the nation's fuel security remains our core as we embrace our role as the Philippines' largest oil company and its sole remaining refinery. With our proven ability to adapt and overcome challenges, Petron will stand by our Tapat Sa'yo commitment to our fellow Filipinos this 2026 and beyond. [Foreign Language].

The Chair will now entertain questions.

Mr. Chairman, we will now start with questions received.

Good afternoon, Mr. Chairman. The first question is from the live stream chat box from Ms. Christa Hermoso. Congratulations [Foreign Language].

[Foreign Language] Thank you for that question. [Foreign Language] meant to maintain our dominance on our volume sales, [Foreign Language]. [Foreign Language] as I mentioned earlier, but not 30% and [Foreign Language] both of which have concentrated on uplifting the efficiency, more particularly the cost efficiency side [Foreign Language]. And then lastly, [Foreign Language] working capital [Foreign Language].This is to ensure [Foreign Language].

Thank you, Director, Erana. Our next question sent through the live stream chat box is from Ms. Carmelita L. [Foreign Language].

[Foreign Language].

Thank you, Mr. Chairman. Another question this time from Mr. Andy C. How did the Middle East crisis affect Petron in the first quarter.

[Foreign Language] We are the only country in Asia, or if not in the world, not imposing taxes on fuel and electricity, and we are the only country that does not keep subsidy. [Foreign Language].

Thank you, Mr. Chairman. Our next question is via e-mail from Mr. Irwin Hanson [indiscernible]. I would like to know more about the plans of Petron for 2026.

[Foreign Language].

Thank you, Mr. Chairman. Another question via e-mail. [Foreign Language].

[Foreign Language].

Thank you, Mr. Chairman. All questions on stock information and dividends will be referred to Petron's stock transfer agent, SMC Stock Transfer Service Corporation, and will be addressed through e-mail. That would be all, Mr. Chairman.

Mr. Chairman, I move to close the open forum and to approve and ratify the management report as presented.

I second the motion.

Moved and seconded. Next item on the agenda is the ratification of all acts and proceeding of the Board of Directors and management since the last AGM held on May 2, 2025 until today. Our Corporate Secretary will guide us on this item.

Thank you, Mr. Chairman. The material items approved by the Board of Directors or the Board Executive Committee since the 2025 ASM include the items in Annex A to the Definitive Information Statement we distributed for this meeting.

Mr. Chairman, I move the following resolution be approved, resolved that all resolutions and proceedings of the Board of Directors and corporate officers of the company since the Annual Meeting of the Stockholders on May 2, 2025, as set forth in the minutes of the meetings of Board of Directors and the Executive Committee be approved, confirmed and ratified.

I second the motion, Mr. Chairman.

Moved and seconded. Next item on the agenda is the nomination for the position of external auditor of the company and ratification of its fee.

Mr. Chairman, the Audit Committee, after its evaluation is recommending the appointment of the accounting firm of R.G. Manabat & Company/KPMG as external auditor of Petron for 2026, and the ratification of its fees for the preparation of the 2026 audited financial statements of Petron and its subsidiaries.

May I request our Audit Committee, Chairman, Director, Ric Marquez, to please confirm.

Mr. Chairman, I confirm.

The Chair will now entertain a motion.

Mr. Chairman, I move that the accounting firm of R.G. Manabat & Company/KPMG be designated as external auditor for the year 2026.

I second the motion.

Moved and seconded.

Mr. Chairman, I further move that KPMG's fees as presented be also ratified.

I second the motion.

Moved and seconded. We shall now proceed to the election of the directors. The Corporate Secretary will read the nominees for the election to the Board.

Yes, Mr. Chairman. The nominees for election to the Board of Directors are the following: Ramon S. Ang, Lubin B. Nepomuceno, Ron W. Haddock, Mirzan Mahathir, Aurora T. Calderon, Francis H. Jardeleza, Virgilio S. Jacinto, Nelly Favis-Villafuerte, John Paul L. Ang, Emmanuel E. Erana, Jacqueline L. Ang, Rey Leonardo B. Guerrero; and for our independent directors, Consuelo M. Ynares-Santiago, Teresita J. Leonardo-de Castro, and Ricardo C. Marquez.

In the information statement circulated to this meeting, the 3 nominees for election as independent directors are mentioned. They are Justice Ynares-Santiago, Justice Teresita de Castro, and General Marquez. This is in accordance with the mandatory requirement of the Securities and Exchange Commission for electing independent directors.

Thank you, Mr. Chairman. And as discussed in the Definitive Information Statement that we distributed for this ASM, in accordance with the corporate governance manual of Petron and further to the review of the Board Corporate Governance Committee, finding that the candidates have all the qualifications and none of the disqualifications, the Corporate Governance Committee has endorsed above nominees for election as director. And for this reason, the Board of Directors has approved and endorsed for the vote of the stockholders, the election of these 15 nominees pursuant to the corporate governance manual of Petron.

May I request Independent Director, Marquez to confirm?

Mr. Chairman, I confirm.

Mr. Chairman, there being 15 nominees. I move that balloting be dispensed with and that all nominees be considered unanimously elected as directors of the company for the ensuing year until their successors are elected and qualified and that the votes of the stockholders present and represented by proxies be distributed and recorded accordingly.

I second the motion.

Motion having been duly made and seconded is carried. The 15 nominees are declared duly elected members of the Board of Directors of the company. On behalf of your Board of Directors, I thank all of you for your vote of confidence. Next item on the agenda is the ratification of directors' fee for 2026.

Mr. Chairman, after evaluation and based on the recommendation of management, and in accordance with the corporate governance manual of Petron, the Board Corporate Governance Committee has recommended the payment of directors' fees for 2026 in the amount of about PHP 11.03 million, and the Board does approve this amount.

Director Marquez, please confirm.

Mr. Chairman, I confirm.

Thank you.

Mr. Chairman, I move that the directors' fees for 2026 be ratified.

I second the motion.

Moved and seconded. Is there any objection? There being no objection, the motion having been duly made and seconded is carried. Next item on the agenda is the amendment of the bylaws of the company.

Thank you, Mr. Chairman. At the meeting of the Board on March 3 earlier this year, the Board approved certain amendments to the company's bylaws. These amendments, as each will be presented on the screen are the following: to include remote communication as an alternative means to attend and vote in meetings of stockholders and directors; number two, to require that discussions in stockholders' meetings be limited to matters stated in the notice; number three, to increase the number of independent directors from two to three; number four, to provide that independent directors must have all the qualifications and none of the disqualifications under applicable law; number five, to provide that the compensation of directors shall not exceed 10% of Petron's net income before income tax; and finally, to delegate to the Board of Directors the power to adopt, amend, alter or repeal the bylaws. Mr. Chairman, we seek the stockholders' approval of the proposed amendments of the bylaws, which were approved by the Board earlier as presented.

Are there any questions? If none, the Chair will entertain a motion.

Mr. Chairman, I move that each of the amendments of the company's bylaws as presented be approved, ratified and confirmed.

I second the motion.

Does anyone have any matter or business to present to this assembly? If none, the Chair will entertain a motion to adjourn.

Mr. Chairman, I move that the meeting be adjourned.

I second the motion.

This meeting is adjourned. Thank you.