Petrosea (PTRO) Signs an Rp 8 Trillion Mining Services Contract with SINI Subsidiary

ISSUER NEWS - JAKARTA. PT Petrosea Tbk (PTRO) has announced the signing of a term sheet for a mining service agreement with PT Pasir Bara Prima, a subsidiary of PT Singaraja Putra Tbk (SINI). The term sheet was signed on March 27, 2024, for the stripping of overburden and coal production in a mining area located in Central Kapuas, Central Kalimantan.

The agreement is valued at approximately US$ 511.45 million, with an estimated overburden of 240 million Bank Cubic Meter (BCM) and coal production of 26.4 million tons over a nine-year period until 2032. To put it in perspective, if converted at the current exchange rate of Rp 15,900 per US dollar, the estimated value of the agreement is equivalent to Rp 8.13 trillion.

Petrosea's Mining and Mine Services Director, Iman Darus Hikhman, revealed that the signing of this term sheet is a tangible manifestation of Petrosea's business expansion into Central Kalimantan. "Petrosea is focused on implementing a business strategy that prioritizes operational excellence, continuous improvement and the application of digital technology solutions on an ongoing basis," Iman said in a release received by Kontan.co.id on Wednesday (3/4).

Furthermore, Petrosea offers a range of pit-to-port project services. These include open pit contract mining services, civil & infrastructure construction, mining project management services, technical & feasibility study consulting services, mine planning & optimization services, and Minerva Digital Platform solutions that can be applied in every mineral and coal mining operation.

Iman continued, all these services are tailored to the needs of each project using the latest technology, ultimately aimed at improving operational efficiency and productivity. "Petrosea also has the ability to monitor and control operational activities in various projects using real-time data through the Remote Operations Center located at the company's headquarters," Iman explained.

PTRO's Profit Declines

According to financial reports on the Indonesia Stock Exchange, PTRO earned revenues of US$ 577.61 million in 2023. This represents a growth of 21.26% compared to revenues in 2022 of US$ 476.31 million.

Last year's PTRO revenue growth was supported by a surge in revenues from the engineering, procurement & construction (EPC) business line by 87.82% and revenue growth from the mining contract business line by 7.09%.

However, the bottom line of the issuer affiliated with tycoon Prajogo Pangestu through PT Petrindo Jaya Kreasi Tbk (CUAN) declined. PTRO achieved a net profit of US$ 12.20 million, down 70.18% compared to the profit in 2022 of US$ 40.92 million.

Iman said that PTRO is targeting operational performance growth by ensuring that production scale and contract value continue to grow while maintaining the best capital structure. This includes conducting capital expenditure prudently and ensuring optimal asset utilization.

Iman emphasized that these operational and financial performance targets are supported by a culture of safety & health through the implementation of a zero, operational excellence and continuous improvement target on an ongoing basis, "As well as a combination of risk management factors and GCG as the backbone of the company's business sustainability in 2024," Iman added.