Pertamina reports lower net profit amid fuel subsidy burden
Friday, November 3 2017 - 01:22 AM WIB
State-owned oil and gas firm PT Pertamina booked a net profit of US$1.99 billion in the first nine months of this year, which is a nearly 30 percent drop compared to $2.83 billion in the same January-September period of last year despite higher revenue.
Pertamina President Director Elia Massa Manik said in a statement issued late Thursday that the company?s finances have been burdened with the obligation to distribute certain fuel products across the country whose prices are administered by the government and has not been increased despite rising crude price. He said that Pertamina has provided subsidy of around $1.42 billion for the administered fuel products sold to consumers at prices below its real economic price.
Pertamina said in the statement that the Indonesia Crude Price in the January-September period of this year increased by 29 percent compared to the same period of last year, which increased the company?s revenue by 18 percent during to $31.38 billion from $26.62 billion.
Elia said that if the fuel prices are adjusted to rising crude prices, Pertamina?s revenue could be higher at $32.8 billion, and net income at $3.05 billion.
?Pertamina could still book profit amid the assignment (by government) to supply fuel oil products to the public across Indonesia, with prices as set by the government,? he said, adding that the profit is also attributed to cost saving and efficiency measures launched by the company.
The positive performance was also supported by higher oil and gas production during the nine months period of this year, where oil output increased by 11 percent to 324,000 bopd compared to 309,000 bopd in the same period of last year, while gas production rose four percent to 2,030 mmscfd from 1,953 mmscfd. In total, oil and gas output increased seven percent to 693,000 boepd from 646,000 boedp.
Elsehwere, Pertamina ssaid that geothermal production increased significantly by 31 percent to 2,932 GWh from 2,333 GWh.
Editing by Reiner Simanjuntak