Pertamina's financial performance

Pertamina claimed its net profit for financial year 2008 surged 54.8% to Rp30.2 trillion or about US$3 billion on higher sales revenue (+44.5%). That's a significant improvement, even though the state-owned oil and gas company shall work harder to close the gap with Malaysia's Petronas which recorded US$19 billion net profit for FY 2008 alone. 

Pertamina reported net sales revenue of Rp554 trillion or about US$51 billion last year, increased 44.5% from 2007 (Rp383 trillion), mainly due to higher prices. Pertamina's crude oil output increased 4% to 54.5 million barrels or 149,000 bpd.

Meanwhile its refined products output increased 12% to 244.6 million barrels, but still far below its installed capacity of 365 million barrels. With such output, Pertamina, which operates seven oil refineries, reported utilization rate of 67% only. Last year's refining operation was even far below 2004 at 72%.

Pertamina has started to be more aggressive in its investment with the acquisition of Medco Energi shares in Tuban Block, East Java. The company invested Rp12.99 trillion last year for all divisions, a 100% growth from 2007. Pertamina is currently seeking opportunities to get participating interest in Mahakam Block currently controlled by Total and Madura Strait block controlled by Husky Oil Ltd. These blocks are in the process of extension of contracts. Government also evaluates four other blocks. They are Block A (Medco), West Madura Offshore (Kodeco), Bawean (Camar Resources), and South Central Sumatra (Medco).

Pertamina also acquired 10% participating interest in the Offshore Manta Gummy Project, Australia, from Anzon Australia Pty Ltd for cash consideration of US$31.5 million last month. 

Unfortunately, until now we have no idea about Pertamina's balance sheet. Finance Minister has issued decree No. 23/2008 to confirm assets worth Rp73 trillion or US$7 billion to be included in its balance sheet. The same year, finance minister also issued decree No.92/2008 stating that assets under PT Pertama EP, PT Badak NGL Co, and PT Arun NGL Co shall be considered government's asset managed by Pertamina.

Government has actually approved Pertamina's initial balance sheet for financial year 2007. Ernst & Young has been appointed as the first auditor. But until now, we haven't seen the report.

But early last year, Pertamina's CFO Frederick Siaahan said Pertamina's total asset was Rp152 trillion where Bontang and Arun LNG plants were not included. Equity was agreed at Rp83 trillion or US$8.3 billion. If those numbers can be used as the basic for financial calculation, Pertamina's ROA for 2008 is 19%, while ROE at 37%. Wow, even better than Telkom. But looks like the "real asset" is far above the agreed number. Some believe Pertamina's total asset is way above US$25 billion. 

Pertamina should be the biggest company listed at IDX. But to be there, there are lots of homework to be done immediately, especially identification and registration of assets. It is a public secret that some of Pertamina's assets, especially properties, have been illegally occupied, acquired, or transferred to certain individuals, group of people, or companies/institutions. One of the most famous is the Plumpang Fuel Depot where Pertamina initially controlled over 153 Ha of land, but the company now controls only 50%, while over 7,000 families have occupied the remaining area. 

Going forward, Pertamina budgeted up to Rp30 trillion or US$3 billion this year. The company has secured US$225 million loans from Japanese institutions for the expansion of Balongan refinery. Pertamina had also secured US$500 million soft loan from World Bank to finance geothermal projects starting next year. About 13 banks have also expressed their interest to finance Pertamina's projects worth US$650 million. Their combined stand-by loan commitment is about US$3 billion. Pertamina, reportedly, is working on bonds and loans package of US$1 billion. 

Still, financiers need better transparency from this company. The recent rumors about political pressures on the board of directors to provide logistic support for certain president candidate would make Pertamina in more difficult position to chasing the neighbor Petronas.

Taken from Yosefardi.com.

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