Petrosea Growth Supported By Asset Expansion And New Mining Projects

Photo: Doc. Petrosea

JAKARTA - PT Petrosea Tbk (PTRO), a subsidiary of PT Petrindo Jaya Kreasi Tbk (CUAN) who is a member of the Barito group, is on a significant recovery path. This was revealed by Yoga Ahmad Gifari from Sucor Sekuritas.

According to Yoga, there are two main factors that encourage PTRO's positive prospects.

"First, PTRO's financial prospects are promising because of the increase in mining contract volume from new contracts and higher contribution from coal mining in line with the increasing sales volume," he said, in a written statement, Wednesday, August 7. Since being taken over by CUAN, PTRO has secured a contract worth USD 1.8 billion.

"This contract increases the revenue backlog in the EPC sector and mining contracts by 152 percent and 60 percent, respectively, showing strong income growth prospects," added Yoga.

In addition, PTRO has acquired coal mining assets in East Kalimantan with reserves of nearly 50 million tons. Production in 2023 reached 0.3 million tons, with plans to increase to 5 million tons per year in the next 3-4 years.

"This expansion is expected to generate revenue of 250 million US dollars by 2028, accounting for 22 percent of total revenue," Yoga explained.

The second factor that supports PTRO's recovery is the entry of new shareholders who carry substantial opportunities.

"Unworked mining assets from CUAN and PT Singaraja Putra Tbk (SINI), including coal, gold, and silica, can lead to additional business growth and income," added Yoga.

It is known that these assets are still in the development stage and have not been included in the current projection.

PTRO has also started diversifying its mining contractor business into mineral projects such as gold, bauxite, and nickel. At this time, the company managed to secure a contract from a nickel mine owned by a subsidiary of PT Aneka Tambang Tbk (ANTM) with a duration of two years.

In addition, PTRO will benefit from the government's approval of the Work Plan and Expenditure Budget (RKAB) for a number of coal mining companies, which have a production target of 922 million tons of coal during the 2024-2026 period. This target shows growth compared to production realization in 2023.

Petrosea (PTRO) has succeeded in making itself an EPS and a tough mining contractor in Indonesia that can withdraw contracts from multinational oil and gas companies to domestic oil and gas companies.

The company has won contracts from several oil and gas and giant mining companies, such as Freeport, BP, Unocal, Total, CononcoPhillips, Newmot, Bayan Group, Kideco, and others. PTRO has a strong relationship with Freeprt as the company's largest EPS customer with a 47 percent contribution to total EPS revenue.

The company has also secured EPS contracts worth US$448 million from BP and Vale Indonesia. This figure is equivalent to 30 percent of the total EPC contracts that have been signed by the company.

In addition, he said, Petrosea (PTRO) is now listed as the six largest coal mining contractor companies in Indonesia with a total coal production of 17 million tons and an overburden removal of 131 million bcm in 2023. The company has also received an additional contract for the duration of the Hidur from its parent SINI worth 1.08 billion US dollars.

With various strategic steps and strong growth prospects, PT Petrosea Tbk (PTRO) shows great potential in facing challenges and opportunities. This significant recovery makes PTRO one of the issuers that should be considered in the mining industry in Indonesia.