Statements of Financial Position

The figures below indicate Shell Pilipinas Corporation's combined statements of financial
position. Total assets of Shell Pilipinas Corporation decreased from Php 117,036,405,000 during
2022 to Php 115,922,215,000 during 2023. Therefore, this translates into a reduction in total
assets of Php 1,114,190,000 from year 2022 to year 2023, which amounts to about (0.95%).

The huge decrease in total assets was mainly due to current and non-current assets.
Shell's current assets decreased to Php 43,435,694,000 in 2023 from Php 49,833,251,000 in 2022,
the percentage of decrease is (12.84%) and was mainly because of lesser cash and current
financial assets. Cash decreased by Php 1,160,350,000 or (39.24%) from Php 2,957,163,000 in
2022 to Php 1,796,813,000 in 2023, which was a deliberate action to reduce cash holdings.
Additionally, current financial assets decreased by Php 85,659,000,000 or (84.06%) from Php
101,897,000,000 in 2022 to Php16,238,000,000 in 2023 because of the fair value of the derivative
assets from outstanding commodity forward contracts.

On the other hand, the company’s total non-current assets increased by 7.86%, with an
amount of Php 5,283,367,000 from Php 67,203,154,000 in 2022 and Php 72,486,521,000 in 2023.
Despite the increase in the amount of non-current assets, the decrease in current assets caused a
signify has reduced their short-term financial debts, where all of the accounts in their current
liabilities decreased. Additionally, non-current liabilities had increased by 33.37% which is
amount can impact in the amount change and percentage change of the total assets from 2022 to
2023.

Moreover, the company’s total liabilities and equities decreased to (0.95%) with an
amount of 1,114,190,000 from Php 117,036,405,000 in 2022 to 115,922,215,000 in 2023. This
was driven by a decrease in total current liabilities, which amounted to Php 11,921,873,000 or
(19.95%). This shows that the company ted to Php 9,455,370,000. This is due to their loans
payable that increased significantly from 2022 to 2023, totaling Php 9,000,000,000 or 150%, for
the new medium-term loan that was drawn in February 2023 and had a duration of five years.

Furthermore, the total equity increased by Php 1,352,313,000 total of 4.67%. Retained
earnings increased by 31.23% to Php 9,455,370,000 are the primary driver of this. Likewise, the
increase was caused by the increase in profit during the year.

Overall, Shell Pilipinas Corporation’s liquidity appears to be weakened slightly. While

Shell Pilipinas Corporation has reduced its current liabilities by (19.95%), a significant decrease
of (12.84%) in their current assets could make it harder to meet immediate financial needs. This
might limit their ability to seize opportunities or handle unexpected expenses.
Statements of Income

The following figure reflects the performance of operations for the year ended 31
December 2023 relative to the previous year ended 31 December 2022. Total net sales declined
by Php 38,166,501,000 or 13.09% from Php 291,482,629,000 net sales for the year ended 31
December 2022 to Php 253,316,128,000 net sales for the year ended 31 December 2023. This
decline is mainly due to lower sales and lower pump prices following general reductions in global
oil prices.

Furthermore, the cost of sales decreased by Php 32,943,064,000 or 12.38% from Php
266,119,767,000 for the year ended 31 December 2022 to Php 233,176,703,000 for the year
ended 31 December 2023 driven by decrease in global fuel prices for petroleum product.
However, the other operating losses (income) net increased by Php 1,276,879,000 or 41,660.00%
from Php 3,065,000,000 loss for the year ended 31 December 2022 to Php 1,273,814 income for
the year ended 31 December 2023 primarily driven by the commodity hedging net mark to
market gain in 2023 as compared to 2022 due to the oil price and market premium volatility
globally.

Additionally, finance expense increased by Php 1,657,527,000 or 80.17%, from Php

2,067,643,000 for the year ended 31 December 2022 to Php 3,725,170,000 for the year ended 31
December 2023 mainly driven by increase in interest and finance charges. While, other income
(charges) increased by Php 1,447,386,000 or 126.27%, from Php 1,146,285,000 loss for the year
ended 31 December 2022 to Php 301,101,000 income for the year ended 31 December 2023,
mainly due to reversal of provision and help in foreign currency gain during the year.

The net income after tax for the period reduced by Php 2,892,827,000 or 70.98% from an
income of Php 4,075,747,000 for the year ended 31 December 2022 to an income of Php
1,182,920,000 for the year ended 31 December 2023. This is primarily driven by decrease in
sales, increase in borrowing costs and inventory holding loss.
Statements of Cash Flows
 In the cash flow of Shell Pilipinas for the period 2022-2023, the operating activities are
increasing because of cash inflow. On 2023, the net cash from the operating activities rose to Php
4,255,779 compared to Php 1,621,015 in the year 2022. This is more efficient use of working
capital that led to increased cash availability and strategic management of payables.

Investing activities incurred a net cash outflow from investing activities amounting to
Php 4,507,843 in 2022 whereas it increased to Php 5,303,910 in 2023. This was primarily due to
continuous investments in property and equipment, which indicates that the company may be
concerned about growth or up-gradation even if it temporarily strains its cash flow.

Financing activities experiences major shift. In 2022. There is a net inflow amounting to
Php 4,172,742 while in 2023 it reversed to a net outflow amounting to Php 112,221. The reason
that the major shift are from large loan repayment of P9,000,000 in 2023 reduced cash inflows
from borrowing activities, increased payments related to lease obligations were significant adding
to outflows while also the company paying cash dividends.

Subsequently, cash reserves would decline by Php 1,160,352 in 2023, more than
offsetting the Php 1,285,914 increase in 2022. This means that the company had to balance
investing for future growth, managing its long-term debt, and rewarding its shareholders.
Although the operating cash flow increased dramatically, the investments and financial liabilities
were huge to the extent that cash declined.