Indika Energy: Performance & Issues

I just recently look at Indika's financial performance for Q1-2011 and found its operating profit fell 30%. Yeah, every company might experience it anytime, but I found something interesting especially with recent issues.

First, open page 101 number 33 and you will see its revenues sheet. According to the page, Indika’s revenues from JOB Pertamina Talisman Jambi Merang, managed by Tripatra, tumbled 90% to Rp15.86 billion. According to its notes, the contract had finished in February 2011 and not extended again. The contract previously had been extended on late 2010 to February 2011.

However, further loss can be covered with the contract with PT Perta-Samtan Gas, which captured in the second quarter 2010 and ended in 2012. Well, one thing shall be considered is JOB Pertamina contract is Tripatra’s second largest income after Chevron Pasific Indonesia contract. The contract contributes up to 30% of Indika’s total income in 2010, which resulting on soaring revenues for 2010 fiscal year.

Another interesting part of Tripatra, its two other contracts with also will end this year (Open page 134 and you will see Tripatra contracts). The first is its biggest contract, the Engineering Services with Chevron Pacific Indonesia valued at US$506.8 (more than double of JOB Pertamina’s contract), and Overland Conveyor Construction with PT Jasa Power Indonesia valued at US$136.7 million.

Tripatra’s performance for the first quarter is considered under-performance with its inability to bag another contracts. If Indika cannot improve their subsidiary, they will face a hell of a job to cover up negative statement on its reports in the end of the year. Indika still cannot depend on Mitra Bahtera Segara Sejati as the contract captured from the coal industry is still low.

Next, open page 139 and you will see their case between Petrosea and PT Ilthabi Bara Utama, owned by Habibie’s son. Under the contract, Petrosea is required to construct and develop the Pakar coal mine in East Kalimantan, but later was ended in 2008 as Ilthabi had made default on their payment. Petrosea stated had put on a lawsuit for the case and demanded for US$28.8 million as compensation.

However, The Indonesia Today recently reported that shareholders of Bayan Resources had proposed the acquisition of Pakar coal from Ilthabi and later injected to ASX-listed Kangaroo Resources. Will Petrosea get what they want? Well, I think the case is not much different with Lapindo mud case. When the government stated it will manage all loss of the incident, where should the people look for compensation? Government? Or Bakrie? Well, just follow the next action as it will get more interesting.

What about Indika shares?

Indika shares today closed 0.61% lower to Rp4,100 per share, cut 13% from end December 2010. Under the price, the company had market capitalization of Rp21.3 trillion. Its highest price in 2011 stood in the early of the year by Rp5,300.