Elnusa?s first-half net profit tumbles on weaker upstream industry

IDX-listed oil and gas services company PT Elnusa Tbk reported that net profit in the first-half of this year tumbled to Rp 14 billion from Rp 145 billion in the corresponding period of last year.

The company said in a statement on Wednesday that revenue in the January-June period of 2017, however, increased by 16.4 percent to Rp 1.99 trillion, year-on-year.

Elnusa said that its core upstream services business has been badly affected by the weak oil price environment which has slowed down upstream oil and gas activities.

The company added that the plunge in the net profit was also attributed to lower income contribution from three oil and gas blocks, which have been its three largest contributors.

The three oil and gas blocks are operated by foreign oil and gas contractors including Total E&P, which operates the Mahakam block in East Kalimantan, where its current contract is set to expire later this year, thus causing a slowdown in operation activities at the block. The government has decided to transfer the block to state-owned oil and gas firm PT Pertamina starting next year.

The company added that a number of large projects including seismic and drilling activities will only start in the second semester of this year, which will contribute to company revenue.

Elnusa currently has contracts worth totaling Rp 4.5 trillion including for seismic, drilling and oilfield servies, and more than Rp 2 trillion for distribution and logistic services. Part of the contracts begin this year, while others next year.

Editing by Reiner Simanjuntak