Barito Pacific's Net Profit Grows Double Digit In Semester I 2024

Illustration. (Photo: Doc. Antara)

JAKARTA - In the first half of 2024, the realization of PT Barito Pacific Tbk's (BRPT) financial performance reflects the existence of sustainable progress on organic and inorganic growth, although during the first six months of this year there were still challenges in the petrochemical industry.

Based on Barito Pacific (consolidated) financial reports for the period ending June 30, 2024 (unaudited), the Company managed to record a profit for the period attributable to owners of the parent entity of 34 million US dollars or 13.3 percent compared to net profit in the first semester of 2023 which was worth 30 million US dollars.

The growth in net profit to double digits was mainly influenced by a decrease in the cost of revenue in Semester I-2024 by 16.1 percent (year-on-year) to US$914 million. This condition is in line with BRPT's revenue in the first half of this year which decreased 15.6 percent (yoy) to US$1.16 billion.

"Our 6M24 results reflect a combination of optimism full of vigilance and ongoing challenges in the global petrochemical sector. Despite the great turmoil, we continue to show good resilience and continue our expansion plan. This can be seen from the progress of organic growth and a series of acquisitions to support future growth," said BRPT President Director Agus Salim Pangestu, in his statement, Wednesday, July 31.

Agus explained that the consolidated decline in BRPT revenue in the first half of 2024 was 15.6 percent more influenced by the volatility that occurred in the global petrochemical industry. In addition, it was also influenced by the implementation of Turnaround Maintenance (TAM) which was already scheduled at the Barito Pacific petrochemical complex, as well as maintenance in one of the geothermal operations units.

"TAM scheduled at our petrochemical complex is a routine activity to ensure the reliability of facilities and comply with applicable regulatory provisions. The recently acquired contribution from Sidrap I helps reduce some of the decline in revenue, because this period managed to achieve the highest production record since it first operated," said Agus.

According to him, the contribution from Sidrap I shows the strategic value obtained by the Company from implementing a portfolio diversification strategy in the new and renewable energy sector (EBT).

Efforts to encourage inorganic growth are carried out by BRPT by implementing a focused acquisition process and prioritizing strategic partnerships, so that this step will strengthen Barito Pacific's market position and at the same time smooth the transition process to become a leading regional player.

Agus said that the condition experienced by BRPT during the first six months in 2024 had an impact on operational performance, as reflected in EBITDA (consolidated) of 271 million US dollars, with an EBITDA margin of 23.4 percent. The ratio of net debt to equity in the first semester of 2024 is relatively stable at 0.73x, which also reflects the strong commitment to maintain a healthy financial profile in the midst of the Company's expansion plan.

"Despite market fluctuations, Barito Pacific's condition continues to show strong resilience with maintained liquidity profiles to support ongoing expansion and provide the ability to take advantage of inorganic opportunities," said Agus.

As is known, in May 2024, Chandra Asri Petrochemical (CAP) together with Glencore Plc signed an agreement to acquire all ownership of Shell Singapore Pte Ltd at Shell Energy Chemicals Park Singapore (SECP). The transaction process is expected to be completed by the end of 2024 and is currently still awaiting regulatory approval. This corporate action is believed to strengthen the position and increase Chandra Asri's competitiveness in the regional market.

In the property segment, continued Agus, BRPT has started an initial phase development plan to expand industrial estates in Subang, with strategic locations adjacent to Patimban Port.

"This prime position will put us optimally in utilizing opportunities that arise in the development of automotive manufacturing facilities and are in line with the government's plan to further increase direct foreign investment (FDI)," he explained.

Agus added that the subsidiary of BRPT, namely PT Barito Renewables Energy Tbk (BREN) will also increase the capacity of geothermal assets through the retrofitting program and the addition of new units. BREN will develop geothermal greenfield assets in Hamiding and Suoh Sekincau, as well as develop Sidrap 2, which is estimated to start being tendered in the second half of 2024," he said.