National Energy Council and Ministry of Industry that recommended gas consumer price of US$ 7,18/mmbtu and gas upstream of US$ 4/mmbtu gives a margin for gas distribution company of US$ 3,18/mmbtu . It is higher than conventional gas distribution of Perusahaan Gas Negara (PGAS) of US$ 3,15/mmbtu which makes EBITDA/mmbtu of US$ 2,4/mmbtu.
Samuel Sekuritas Indonesia research shows a flat distribution volume of 802mmscfd and EBITDA of US$ 1,8/mmbtu, PGAS is able to pay the capital expenditure (capex) of US$ 500 million. PGAS’ EBITDA will reach US$ 527 million in 2016. The recommendation allows PGAS to pay capex without government assistance.
According to Samuel, the company is planning to increase the pipe capacity of 164 mmscfd per year until 2019, maintain the gross profit of US$ 3,1-US$ 3,4/mmbtu, and stabilize the utilization rate in 58% and it will make an EBITDA growth by 2% in the period of 2015-2019F. Samuel Sekuritas recommended BUY for PGAS with a target price of IDR 3.373. (*)
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