Industry Analysis
Gas Industry: Rapidly growth since 2007
Based on the
data ministry of energy and mineral resources, the gas proven reserve is about
104 – 112 TSCF between in 2008 to in 2012. Natural gas is produced from several
local field such as Masela, Mahakam, Natuna, west natuna, Jangkrik and Jangkrik
North east blocks.
Based on
Pertamina, the LPG production is beneath its demand in 2012. In that year the
demand of LPG is 5.3 million MT, It is only 50 % of total demand. The rest is
imported from oversea to fulfill local LPG demand.
The gas industry
was rapidly growing after Government had made energy conversion program,
conversion of kerosene in to gas in 2007. As result of this, the gas industry
continued to advance from 1.69 million MT to about 5.3 million MT in 2012.
For 3 – kg gas
container, there is still a subsidy from government; the price is reachable by the
consumer, mostly the household. The subsidy has been given since conversion
program in 2007.
Government
changed its regulation in natural gas trading; there will be natural gas pipe
for household consumption in 2015. According to local news media, the project
will be conducted by PGAS. On other hand, MRT in capital town has been using
gas as its fuel and there are several gas stations in Jakarta. There may
possibly more gas station for vehicle in the future.
In conclusion,
the Gas industry is promising segment due the supply of LPG is below the
domestic demand of LPG. The industry will continue to expand as the Natural Gas
demand will be predicted to increase at the future.
Financial
Analysis
This is a
Natural gas refinery and processing company which has corporation with state
owned oil and gas company, pertamina. The company is owned by Trinugraha
Akrajaya Sejahtera with 30 % of total share, Ramaduta Teltaka with 20 % of
total share, CLSA with 10 % and public with 40 % of total share.
Giribaldi
Thohir, a local conglomerate, is the president director of the company. The
company attains its gas supply from related parties, PT Ogspiras Basya Pratama
(OBP). It has gas purchase contract with pertamina. SEP supply LPG for
pertamina which is arranged in such LPG purchase agreement in particular period
of time.
In 2012 the
company spent a lot of cash for professional fee due to its expansion of LPG
plant. Enerflex ltd was appointed as the supplier of machine and was providing
services in 2013. The operating expense to sales ratio in 2012 was at 41.7 % of
sales. Then in 2013 the company could reduce operating cost to sales ratio to
20.5 %.
The company has
only one business segment, it is LPG refinering. LPG product is the biggest
portion of total sales in 2013 which is about 89 % of total revenue.
Large Cash to
sales ratio and big contract from Pertamina
Cash to sales
ratio in 2012 is about 53 %, it is lower than cash to sales ration in 2013,
which is at 85 % of total sales. The company is surplus in the last several
years; the LPG contract with pertamina is the main income of its business. The
company enjoys the conversion of kerosene in to gas program from regulator.
Instead the cash
cycle days in 2013 is slowing down than 2012, it could increase its sales at
6.9 % growth in 2013. The gross margin increases slightly from about 70 % in to
71 % in period of 2012-2013. The net profit margin of 2013 has also improved
than 2012 as the company reduced operating cost. It is lifted up from 13.2 % in
to 29.7 % in between 2012 – 2013.
Forecasting
As the economic
growth in 2015 is predicted better than 2014, the gas consumption will continue
to hike. According to Bloomberg the gas and oil consumption in 2004 – 2013 has
average growth approximately at 7 – 8 %.
The sales growth
consumption is taken at 10 % in 2014 as the company increases its capacity 55 %
up from 36.300 MT per year in to 56.100 MT in 2014 and the demand of gas is
above its supply. Revenue growth at the next two years is assumed at 10 %
up. On other hand the CAGR of LPG
consumption is at 25 % in between 2007 – 2012.
The activity
ratio is assumed at the same rate with 2013 so do profitability ratios, other
CA to sales ratio and other non CA to sales ratio.
The company is
presumed spending its fund to expand its capacity with additional equipment and
machine valued USD 20 millions.
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