PHE profit falls as impairment charges weigh despite strong cash flow

By Bernard Loebs

PT Pertamina Hulu Energi (PHE) reported a decline in annual profit for 2025, as higher impairment charges and depreciation costs offset resilient operational performance and solid cash generation.

The upstream oil and gas unit of state-owned PT Pertamina posted net profit of US$2.18 billion for the year ended December 31, 2025, down from US$3.12 billion in 2024, according to its audited financial statements.

Total revenue fell to US$13.82 billion, compared with US$14.33 billion a year earlier, reflecting softer sales volumes and pricing dynamics in the oil and gas market.

Despite the decline in revenue, the company maintained a relatively stable cost base, with total cost of revenue at US$9.32 billion, broadly flat year-on-year.

Gross profit stood at US$4.50 billion, down from US$5.00 billion in 2024.

Read also: PHE targets higher oil, gas output in 2026

A key drag on earnings came from a sharp increase in impairment of non-financial assets, which surged to US$1.10 billion, compared with US$215.7 million in the prior year.

In addition, depreciation, depletion, and amortization (DD&A) expenses rose significantly to about US$2.91 billion, highlighting the capital-intensive nature of upstream operations and the impact of reserve-based accounting.

As a result, profit before tax dropped to US$3.67 billion from US$4.89 billion in 2024.

PHE’s total assets rose to US$31.15 billion at end-2025, up slightly from US$30.43 billion a year earlier. Oil and gas assets remained dominant, accounting for more than half of total assets at US$17.46 billion.

Editing by Reiner Simanjuntak