Medco's profits soar on higher oil and gas prices

Medco's profits soar on higher oil and gas prices

Rendi A. Witular, The Jakarta Post, Jakarta

Energy company PT Medco International's first semester net profit soared by 20 percent on higher international oil and gas prices.

In a statement released on Wednesday, Medco said that it had recorded a rise in first-half profit to US$52.7 million or 1.7 U.S. cents per share, from $44.6 million or 1.3 cents in the same period last year.

Sales revenue increased by 9 percent to $227 million from $207 million. Net revenues from its subsidiaries also rose by 18 percent to $52.7 million from $43.9 million.

However, the company booked a foreign exchange loss of $798,630 in the first half of the year, compared with a gain of $2.51 million a year ago.

Mining sector analyst Norico Gaman from BNI Securities said that he had predicted that Medco would book higher first-half profit because, over the period, the company had enjoyed higher oil and gas prices due to the Iraq war.

"The company managed to take full advantage of the rising price of oil by increasing its oil output to around 90,000 to 95,000 barrels per day (bpd) from around 88,000 bpd in the first semester last year," said Norico.

On average, oil prices stood higher at around $30 to $35 per barrel in the first half of the year, compared with $20 to $25 in the same period last year.

The price climbed due to fear of possible supply disturbance caused by the U.S.-led invasion of Iraq and the war's impact on the global economy.

Norico forecast that even if the price of oil were lower in the second semester, Medco would still book higher sales and net profit by year-end due to its higher oil and gas output.

He predicted that Medco's net profit in fiscal year 2003 would increase to $92.5 million from $84.1 million in 2002.

Medco, which was founded by businessman-turned-politician Arifin Panigoro, issued seven-year bonds worth $250 million globally in June this year to fund expansion.

The company submitted bids last month to buy four oil exploration areas in the country from ConocoPhilips.