INDY is optimistic to make profit in 2017

JAKARTA. PT Indika Energy Tbk (INDY) is more optimistic in this year. This company is targeting to make net profits by the end of 2017, after suffered losses since 2013. As of quarter III-2016, INDY still suffered as much as US$ 161 million net loss.

President Director of INDY Arsjad Rasjid said that during the recent years, the company has made some policies, including efficiencies and business restructuring. “We have settled some problems. Therefore, for the first time since 2013, we are optimistic to record positive performance in this year,” he said during the visit to KONTAN office, Tuesday (10/1).

Most of INDY revenues are still derived from mining contracts and services, as well as coal sales. INDY predicts that coal productions will remain stagnant at around 32 million ton as of the end of 2017.

Arsjad said, the mining service business of its subsidiary PT Petrosea Tbk (PTRO) will have better prospects. The increase in coal price and the reactivation of coal mining can increase the company’s mining services revenues. “Petrosea will have maximum utilizations in this year,” he added.

The company is preparing as much as US$ 80 million capital expenditures, or higher than the last year capital expenditures that amounted to US$ 38.2 million. Most of the capital expenditures will be allocated to fund some expansions. “We do not allocate much capital expenditure to preserve the cash,” Arsjad said.

As part of business restructuring, INDY will also open chances to obtain funds through stock exchange.

Focus on electricity projects
This year, this company will focus on a worth of US$ 2 million steam electricity power plant (PLTU) project of Cirebon II, which has 1x1,000 megawatt (MW) capacities. This project is handled by INDY subsidiary PT Cirebon Energi Prasarana.

INDY has shared its participation rights to co-investor PT Imeco Multi Prasarana (IMP). This division aims at reducing the risks of the project. Arsjad is targeting that the financial closing of the PLTU project will complete in quarter I of this year. As much as 80% of about US$ 1.6 billion investments in this project will be derived from project financing, such as from Japan Bank for International Cooperation (JBIC).

Analyst at Minna Padi Investama Christian Saortua said, INDY has been conducting efficiencies since the few recent years. In 2015, INDY had settled some debts and bought back notes as much as US$ 128.57 million. “Those have reduced the interest rate burdens and corporate financial burden of the company,” he said.

According to Christian, coal price may increase significantly in this year. “The less corporate burdens and the increase in coal price will improve INDY’s margin in this year,” he predicts. (Muhammad Farid/Translator)