JAKARTA (TheInsiderStories) - State owned energy company PT Pertamina posted net profit of US$1.83 in the six months to June 2016, surged 221 percent from the same period last year, supported by an improvement in operational performance as well as efficiency measures undertaken by the company in both upstream and downstream sector.
In the period, the company posted revenues of US$17.19 billion, declined by 21 percent from US$21.79 billion in the same period last year, operating profit reached US$3.28 billion, up 110 percent from US$1.56 billion a year earlier.
Around 60 percent of the revenues were contributed by downstream business and the remaining 40 percent from upstream business.
Pertamina’s net profit appears to return to normal level after its net profit plunged last year.
Pertamina’s President Director Dwi Soetjipto said the results were encouraging, indicating that the efficiency measures undertaken by Pertamina has brought about fruitful results, including the closure of its unit Petral, allowing the company to buy or import crude directly. The results were also booked on the back of low oil price and Pertamina and Indonesia’s government to assure national energy security.
“The two conditions prompted Pertamina to take initiatives that led to improved performance, efficiency in all layers of operation and creating value added from upstream to downstream. In this circumstance, we are thankful because in the first semester, Pertamina booked revenues of US$17.19 billion,” he said in a press conference.
The other efficiency measure is done through Breakthrough Project, which reached US$1.21 billion in the period, higher than target of US$838 million. The company targets the breakthrough project to reach US$1.64 billion by the end of this year. In the upstream sector, Pertamina managed to cutcosts by US$595 million, supporting the realization of the breakthrough program.
In downstream sector, Pertamina managed to cut production costs, making its refinery output to be more competitive. Yield valuable product of its refineries increased to 78.65 percent from 72.75 percent a year ago.
In the period, Pertamina produced 640,000 barrels of oil equivalent (boepd), comprised of 305,000 boepd of oil and 1,938 boepd of gas, up 16.4 percent year-on-year.
Pertamina’s Finance Director Arief Budiman said as of end June, the company has a strong cash reserve (cash on hand) of US$5.088 billion, compared to US$3.34 billion in the same period last year, and compared to US$3.11 billion at end of 2015. “In term of cash position, we are in strong position to expand and make some acquisitions going forward,” he said, adding that portion of the cash will be used to acquire stakes in French company Maurel & Prom.
The company sets capital expenditure of US$3-5 billion this year, of which US$1 billion has been spent.
Arief said as for full year, the net profit would be less than double than the first half 2016 net profit.
In the first half, Pertaminasold 31.6 million kiloliters of fuel, up 5.3 percent from the same period last year. In the period, it also sold new fuel products such as Pertamax Turbo. Pertalite fuel also showed an increase.
Projects Update
Pertamina also on Thursday (Aug. 25) provided updates on its projects, both in the upstream and downstream. First, geothermal power plant PLTP Ulubelu 3 with capacity of 1×55 MW has been finalized and supplied power to PLN’s power grid system. Second, the Lumut Balai power plant with capacity of 2×55 MW has also made significant progress, around 46 percent from completion.
A number of gas infrastructure projects are making good progress, such as Arun-Belawan-KIM-KEK gas pipeline project; Muara Karang-Muara Tawar pipeline, Gresik-Semarang and Porong-Grati pipeline projects.
Its refinery upgrading project (RDMP) Balikpapan and RDMP Cilacap refineries are also making good progress. RDMP Balikpapan is now entering basic engineering design, while RDMP Cilacap is entering front-end engineering design (FEED), while GRR Tuban is finalizing Bankable Feasibility Study.
Marketing infrastructure projects such as TBBM Pulau Sambu and Tanjung Uban are now in final stage, while General Purpose (GP) and Medium Range (MR) tanker vessels will arrive in fourth quarter 2016. (*)