ELNUSA - ELSA

Macro economy in Indonesia

The Central Bank expected GDP growth in 2013 is approximately at 5.5 % - 5.9 %, this is lower than economic growth in 2012 which is at 6.2 %. BI Rate at recent is at 7.5 %, it has been increased from 5.75 % in December of 2012, BI seems continue in conducting tight money policy until the elections end at 2014. Central Bank expects that GDP growth in 2014 will in range 5.8 – 6.2 %.

The quality of economic growth has to be prior concerns. Who are growing reach and who are downing poor?  Some strategy has been done such as direct cash support for the poor citizen who has been done in the last three years.  Each person was given cash amounting to IDR 300 thousands rupiahs.

Meanwhile Organization for economic and Development (OECD) in last October that Indonesia’s economy would grow at an average growth of 6 % during the period 2014 – 2018. I think the prosperity of Indonesia is still questionable; it depends on the elected president who will determine policies as the one of key driver of the advancement.  In other side, the nation gets several volcano disasters at few places, so far it does not ruin significantly. 

Based on the data at the last three years, proven reserves of oil in Indonesia tend to decline. Inversely with proven reserves of gas, it tends to rise. According to ministry of energy and mineral resources the energy supply in 2012 amounted to 1,776 million Barrels. The petroleum based fuel is 13.83 % of total energy mix and the Natural gas is 23.18 % of total energy mix. Natural gas will be more dominated than oil in the future.

In 2012 Indonesian upstream oil and gas business executive board is dissolute by the constitutional court based on its resolution no. 36/PUU-x/2012 on 13rd November 2012. The government made new council, the Provisional Executive Work Unit (SKSP Migas). That event did not affect all contracts which are called as PSC as existing contracts.

Key Driver

The contracts of Pertamina are the main source of revenue.  Pertamina has 41 % share of PT. Elnusa. Pertamina is Oil Company which is owned by government and it has many oil and gas projects in Indonesia. The growth of the company depends on performance of pertamina. Pertamina also has many affiliates such as Patra Niaga, pertamina E & P, pertamina hulu and etc.

In 2011 – 2012 the company performs its growth with 1.3 % up in its revenue. The slow growth is affected by the number of oil and gas projects in 2012.

In 2011 -2012 the company has available cash more than 10 % of its sales. It means the company tends to allocate the cash in to the Bank as time deposit, call deposit and saving account. It seems they has no new project yet which need fund to be allocated in.

I adjust that the company will able to increase its sales with the same growth because there are no new reserves found. Its revenue will come from repeated order from existing project..