Energy Transition Will Give Positive Signal To PGEO Performance

JAKARTA - The performance of PT Pertamina Geothermal Tbk (PGEO) has the potential to be positive amid efforts to transition to new and renewable energy (EBT) in Indonesia.

"If we talk fundamentally, in PGEO's position as an issuer in the geothermal energy sector, of course there is no problem. There is absolutely no problem. Everything is good, and it's going to get even better in the next five to dive years," said PT Yuanta Sekuritas Indonesia Head of Research Chandra Pasaribu quoting Antara.

According to Chandra, PGEO's positive projection cannot be separated from the government's trend of starting to initiate so that people can move to take advantage of green energy (EBT).

"That way, when we talk about fundamental cases, investment of course in green energy companies such as PGEO is the right choice," said Chandra.

Until now, only two geothermal issuers have been listed on the Indonesia Stock Exchange (IDX), namely PGEO as a subsidiary of PT Pertamina (Persero), and PT Barito Renewables Energy Tbk (BREN).

According to Chandra, PGEO has a fundamentally bright outlook in the next few years, along with the government's efforts to accelerate the energy transition process to EBT in Indonesia.

However, he reminded that this good potential cannot be simply conveyed to investors regardless of preferences from market participants.

Meanwhile, what Chandra means is a difference of perspective between retail investors and institutional investors, where there are very basic different perspectives between the two types of market players.

If we talk to retail investors, they have a short investment horizon so that sometimes they can ignore the fundamental side. On the other hand, institutional investors have an intermediate to long-term investment orientation, so they need to limit their investment risk by looking at fundamentals," said Chandra.

Until the third quarter of 2023, PGEO recorded a total increase in electricity and steam production by 3,586 GWh or the equivalent of 4.3 percent year on year (yoy).

PGEO's operation was recorded to be stable with a 99.9 percent availability factor for steam, and 97.6 percent for electricity.

Meanwhile, the combined capacity factor reached 86.0 percent, with 81.0 percent of steam and electricity at 92.0 percent in the third quarter of 2023, indicating high efficiency in operation.

"We see a strong momentum for PGEO because of the issue of green energy which is currently being intensively voiced. Yuanta has increased long-term growth to 3 percent, from the previous 2 percent," said Chandra.