Indika plans higher capex next year

IDX-listed energy and coal mining company PT Indika Energy Tbk plans to allocate US$90 million for capital expenditure (capex) next year, slightly 2.27 percent higher than $88 million allocated for this year, Kontan reported on Wednesday.

?Funding source will be a combination of internal cash and leasing,? said Indika Director Azis Armand to the paper.

He said that the bulk of the planned capex will be used to finance the replacement of heavy equipment at its mining and oil and gas services subsidiary PT Petrosea Tbk.

This year, Petrosea also gets the largest capex allocation of $68.3 million, but realized spending has been quite slow as only $1.7 million has been spent in the first nine months of this year. The overall capex spending of Indika as per end of the third quarter of this year only stood at $3.1 million, or 3.5 percent of the total allocated $88 million for the full-year.

Azis said that Indika will also focus on coal subsidiary PT Kideco Jaya Agung, in which Indika recently acquired additional 45 percent shares, increasing its ownership to 91 percent.

Kideco is expected to increase coal production next year to 34 million tons from the expected 32 million tons for this year. (*)