KONTAN.CO.ID - JAKARTA. PT Rukun Raharja Tbk (RAJA) has prepared a strategic plan and performance outlook for the next 10 years. In order to achieve this target, RAJA has a number of strategic projects and expansion agendas to support its business growth.

RAJA President Director Djauhar Maulidi said that the current main businesses, namely upstream, midstream and downstream in the oil and gas (oil and gas) sector, will still be the backbone until 2034. The contribution to RAJA's revenue from this business line is estimated to reach 60%.

RAJA will encourage expansion outside the core business, including by entering the Liquefied Natural Gas (LNG) business and petrochemicals through blue ammonia. Djauhar targets RAJA to start reaping profits from the LNG and petrochemical business starting in 2028, with an estimated contribution of 30% to revenue.

Furthermore, starting in 2032 RAJA wants to harvest the results of the New and Renewable Energy (EBT) business, which is estimated to contribute 10% to revenue. "So our business anatomy in 2034 or the next 10 years will be 60% from upstream, midstream and downstream as core sectors, around 30% from LNG and petrochemicals and 10% contributed from NRE," said Djauhar in a public presentation, Wednesday (16/10 ).

The issuer owned by Puan Maharani's husband, Happy Hapsoro, has also prepared a number of strategic projects and priority expansion plans. RAJA Director Sumantri Suwarno explained that the agenda consists of projects that have been contracted, as well as those that are still in the process of acquisition and feasibility studies.

First, the Fuel Oil (BBM) pipeline construction project in East Kalimantan. RAJA's subsidiary, PT Petrotech Penta Nusa is the leader of the consortium and has signed a contract with PT Pertamina Patra Niaga on October 4 2024. This 120 kilometer long pipeline project will connect the Tanjung Batu Balikpapan BBM Terminal (TBBM) to TBBM Samarinda and TBBM Palaran.

This project, with an estimated investment of IDR 3 trillion, will begin the construction phase in the fourth quarter of 2024 and is targeted for commercial operation or Commercial Operation Date (COD) in the fourth quarter of 2026. Through Petrotech, RAJA disbursed investment with a funding participation portion of IDR 982.45 billion or the equivalent of US$ 63.29 million. After COD, this project is projected to generate annual revenue of IDR 225 billion and contribute EBITDA of IDR 200 billion per year.

Second, RAJA through its subsidiary, PT Triguna Internusa Pratama, has signed an agreement with Energy Equity Epic (Sengkang) Pty. Ltd. The agreement signed on October 11 2024 is related to the rental service of a booster compression plant for the development of Kampung Baru in the Sengkang Block. RAJA will invest around US$ 28 million - US$ 30 million to work on the project which is targeted to reach COD in the fourth quarter of 2025. With a five-year contract, this project is projected to contribute around US$ 50 million to RAJA's revenue.

Third, RAJA is conducting a feasibility study for the construction of an LNG Terminal. Sumantri has not provided details regarding investment details, development plans and strategic partners in this project. However, he emphasized that the LNG Terminal is an important project to capture the prospects for LNG demand in the Java region. "We are still carrying out feasibility studies to see the right location, market studies and potential supply studies that will be absorbed to serve demand. West Java is one of the big potentials for us to choose," explained Sumantri.

Fourth, RAJA and partners are conducting a feasibility study to build a gas supply facility in Kalimantan. Sumatri has not yet revealed the details of this project. "It depends on the results of the feasibility study, because it concerns the strength of the gas supply, the level of demand and price agreements with potential buyers," he added.

Fifth, RAJA is in the final stage of the process of purchasing participating interests in oil and gas blocks as well as the final stage of the process of acquiring downstream oil and gas projects in eastern Indonesia. "We are careful because we have to look at all the potential and risks that may arise from this investment decision, considering that the scale is quite large," said Sumantri.

Sixth, construction of a Solar Power Plant (PLTS). RAJA together with partners from the Middle East participated in the PLTS tender from PT PLN (Persero) in several regions. RAJA looked at four potential areas in Yogyakarta, Central Java, West Java and Banten. Sumantri targets RAJA to be able to work on at least two locations with a capacity of around 90 Megawatts (MW) to 100 MW each. He has not disclosed regarding RAJA's partners in the construction of this PLTS, or the investment being prepared.

Sumantri only provided an overview of the rule of thumb for PLTS projects, where the investment required per 1 MW is around US$ 1.5 million - US$ 2 million. So, the investment required to build a PLTS of 100 MW reaches US$ 150 million - US$ 200 million. "But regarding how much RAJA will invest, it really depends on the percentage of participation in the project, because later there will be several parties who will participate in this investment," said Sumatri.

Meanwhile, for the blue ammonia project that will be worked on by RAJA, the rule of thumb investment could reach US$ 800 million - US$ 900 million to build a capacity of 700,000 metric tons per year. However, investment details will only be known when the study has been completed and entered the Final Investment Decision (FID) stage.

On the other hand, in terms of performance, RAJA's revenue and net profit have steadily increased with an annual increase in revenue of 67.15% from US$ 73.89 million to US$ 123.51 million until June 2024. RAJA achieved a net profit of US$ 14, 29 million in semester I-2024, or a growth of 55.32% compared to a profit of US$ 9.20 million in the same period last year.

Director of Rukun Raharja, Ogi Rulino, revealed that RAJA's income comes from sustainable sources, namely from long-term contracts with an average duration of 10 years. "So (positive performance) will continue in the future. It is not cyclical, fluctuating depending on commodity prices, but it is solid and sustainable," stressed Ogi.

Meanwhile, Djauhar gave an idea that performance in the third quarter of 2024 tended to be stable compared to the previous two quarters. Djauhar also estimates that RAJA's performance will be stable in the fourth quarter of 2024. "Hopefully it can be stable (until the end of the year), so that we can achieve better growth than last year," said Djauhar.

In terms of stock movements, RAJA closed trading Wednesday (16/10) with a gain of 5.39% to the level of IDR 1,955 per share. Year to date, RAJA has accumulated an increase of 38.65%.

(SOURCE)