Petrosea to slash exposure to coal mining

By Tri Subhki R

IDX-listed mining contractor company PT Petrosea Tbk is going to reduce its exposure to the coal mining sector. The company, a subsidiary of IDX-listed energy firm PT Indika Energy Tbk (INDY), currently is looking for new projects in oil and gas sector and civil engineering as part of diversification strategy amid falling coal prices.

?Currently, our exposure to mining sector is 85 percent and we aim to reduce it to 50 percent in the coming five years in a bid to make Petrosea a more stable company,? Petrosea Director M Kurnia Ariawan said.

Kurnia added that the company will push more efforts to get oil and gas projects and engineering and project management (EPM). In its business diversification effort, Petrosea has secured some new projects in the first quarter of 2015, namely US$16 million worth of oil and gas project, and $8 million worth project in PT Indonesia Bulk Terminal (IBT).

In 2014, Petrosea?s revenues from mining services declined by 5.8 percent to $294.2 million, however non-coal revenue improved as the company started to make progress in rebalancing and diversifying its sources of revenues.

Petrosea?s oil and gas services and EPM showed encouraging revenue growth despite falling hydrocarbon prices and slowdown in oil and gas exploration. ?These business achieved growth of over 12.4 percent to a total $53.8 million, representing over 15.5 percent of total revenue,? Petrosea President Director Richard Bruce Ness said in a statement.

Petrosea?s total revenue in 2014 was $348 million or 3.4 percent lower than $360.1 million in the previous year. Its net profit plummeted by 87 percent in 2014 to $2.3 million from $17.3 million in 2013.

Editing by Reiner Simanjuntak