PT Medco Energi International Tbk (MEDC) acquired PT Amman Minerals International (AMI), the holder of 82.2% stake in Newmont Nusa Tenggara (NNT). It is considered to have a positive impact on the company’s performance because it reduces dependence on revenues from oil sales. PT Ciptadana Securities recommends buying MEDC stock with a target price of Rp 1,930 per share.
Medco Energi bought 82.2% stake in AMI of Newmont Mining Corporation and Sumitomo Corporation for US$2.6 billion. With this acquisition, MEDC’s income from non oil and gas business will grow. Newmont Nusa Tenggara produces as much as 676 000 ounces of gold last year, a sharp increase compared to 2014 as many as 76,000 ounces. NNT also noted an increase in copper production into 2014 as many as 224 000 tonnes compared to 71,000 tonnes. This increase is due to government policies that give leeway raw mineral exports.
MEDC’s revenues in 2015 were derived from oil and gas sales reached US$574.4 million, down 18.1% compared to 2014 amounted to US$701.4 million due to a decline in world oil prices. The revenue from non-oil reached US$54.1 million, up 9.8% compared to 2014 at US$49.3 million.
In the trading session on Friday (1/7) morning, MEDC share price rose 20% to a level of Rp 1,800 per share. In the last month, the stock price MEDC recorded a significant increase 29.14%. (*)
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