Indonesian Oil & Gas Companies in Focus: Elnusa
Despite sliding net profit in full-year 2017, Indonesian upstream oil and gas company Elnusa saw its shares surge 42.47 percent to IDR 530 per share so far in 2018. The company's net profit fell 25.80 percent year-on-year (y/y) to IDR 246.14 billion (approx. USD $18.1 million) in 2017, while its revenue actually rose 37.56 percent (y/y) to IDR 4.98 trillion (approx. USD $366.2 million).
Besides releasing its FY-2017 corporate earnings last week, Elnusa, a subsidiary of fully state-owned energy company Pertamina, also announced that it secured a USD $80 million long-term syndicated loan from Bank Sumitomo Mitsui Indonesia, Bank of Tokyo-Mitsubishi UFJ (MUFG), Bank ICBC Indonesia (ICBC), and Bank UOB Indonesia (UOB).
Budi Rahardjo, Finance Director of Elnusa, said the company targets to post stronger growth in 2018 and therefore obtained the syndicated loan as it requires fresh funds to finance new projects as well as the purchase of new equipment. Rahardjo added that Elnusa will purchase the latest technological equipment for seismic work, while increasing the company's fleet of tank cars and barges.
Wahyu Irfan, Manager of Corporate Communications at Elnusa, said the company allocated IDR 400 - 500 billion (approx. USD $33 million) for its 2018 capital expenditure budget, which will be funded by both internal cash reserves and external sources (including bank loans).
Elnusa's corporate earnings are also projected to improve in 2018 on the back of the stronger crude oil prices. The latest OPEC forecast puts the average crude oil price in full-year 2018 at USD $55 per barrel.
A large chunk of Elnusa's net profit originates from the downstream segment through subsidiary Elnusa Petrofin, which is engaged in fuel logistics and transportation services. This unit's net profit surged 81 percent to IDR 207 billion in 2017. Elnusa targets to see growth up to 20 percent for this unit in 2018 supported by stable fuel transportation activities.
Future Projection Corporate Earnings Elnusa:
| 2016 | 2017 | 2018F | |
| Net Revenue | 3,620.6 | 4,979.0 | 5,167.0 |
| Net Profit | 310.9 | 247.0 | 335.0 |
| Net Profit Margin (%) | 8.6 | 5.0 | 6.5 |
| P/E Ratio (x) | 10.1 | 11.0 | 10.7 |
| P/BV (x) | 1.1 | 0.9 | 1.1 |
| EV/EBITDA | 4.1 | 3.5 | 3.9 |
in billion of IDR rupiah, unless stated otherwise
Source: OCBC Sekuritas Indonesia (21/02/2018)
Meanwhile, Elnusa posted a IDR 10 billion loss for its (upstream) drilling and oilfield services in 2017. This loss stems from the Q1-2017 period. In Q4-2017 the company managed to collect USD $55 million in new contracts (including contracts from its parent company Pertamina), hence boosting the FY-2017 new contracts value to USD $160 million. This figure is expected to rise further in 2018.
OCBC Sekuritas advises investors to buy shares of Elnusa as it put its target for the company's shares at IDR 750 a piece. On Monday (26/02) shares of Elnusa, listed on the Indonesia Stock Exchange, rose 4.95 percent to IDR 530 a piece.
Stock Quote Elnusa - ELSA: