Masela Block: Testing Jokowi’s Wisdom (3)
President Jokowi has yet to make decision on plan of development (PoD) for the giant LNG project to process gas from Masela Block in Maluku province. His decision will be another test of the president’s leadership and ability to walk out of the jungle of Indonesian politics. The decision might also lead to recalibration of power between influential figures in the ruling elite.
Speculation in Energy Stocks
Indo Tambangraya Megah (ITMG) jumped another 17% with significant trading volume in the first hour of trading on IDX Monday (Feb 29). That means the stock already gained 63% from its recent bottom on relatively strong performance last year and speculation about possible rally in coal prices.
Palm Oil Journal
Felda Global Ventures Holdings produced 154,182 tons of crude palm oil (CPO) last month, fell significantly by 23.8% from December 2015. Our database pointed to a combined output of 25 plantation companies listed on KL Stock Exchange at 665,700 tons in the month, dropped by 21% from December 2015.
London Sumatra: Results & Outlook
London Sumatra Plantations (LSIP), controlled by Salim Group, posted net profit of Rp623 billion last year, fell 30% from 2014 due to falling prices of palm oil and natural rubber. The Company, however, performed significantly better than Astra Agro Lestari (AALI), including in the fourth quarter of 2015.
Commodities: Volatility is King
WTI crude advanced 2.89% to US$33.08 per barrel on Nymex Thursday (Feb 25), while Brent crude closed above US$35.19. This lifted shares of oil and gas producers. US coal production for the week ended February 20, meanwhile, dropped 20.2% from the comparable week in 2015, but failed to lift shares of coal producers.
First Resources vs Astra Agro
First Resources Limited, a palm oil company listed on SGX but controlled by Indonesian business family, booked net profit of US$107.9 million last year, dropped 37.8% from 2014 due to falling prices of palm oil and squeed refining & processing margins. First Resources, however, performed significantly better than Astra Agro Lestari.
Oil & Gas Journal
Average selling price of oil and liquids were US$40.18 per barrel last year, crashed 60.2% from 2014, but SGX-listed KrisEnergy Ltd—which acquired lots of oil and gas blocks in Indonesia in recent years—reported 21.6% increase in EBITDAX to US$37.15 million last year. Also in this report: Elnusa’s full year 2015 results.
Astra Agro: Results & Outlook
Astra Agro Lestari (AALI) booked net profit of Rp619 billion last year, dropped significantly by 75.3% from 2014 due to falling prices of palm oil and derivatives. The plantation company, however, reported stronger bottom line in the fourth quarter, despite deeper corrections of CPO prices.
Coal Falls Further to New Low
Shares of coal producers were mixed in the region Monday (Feb 22) as WTI crude oil retreated to below US$30 per barrel. Coal prices yet to recover, where the reference price of Indonesian thermal coal for February 2016 declined further to US$50.92 per ton. The reference price is 19.07% below February 2015 and 4.3% below January 2016.
Palm Oil Journal
KPB Nusantara, the joint marketing office of state plantations, sold CPO packages at Rp7564 per Kg Friday or around US$558 per ton. That means the commodity has jumped 33% from its bottom in Jakarta’s physical market. The average spot month settlement price of CPO (FCPO) for February 2016, meanwhile, is RM2483/ton on Bursa Malaysia Derivatives, an increase of 9.3% year-on-year.