Performance Trend in July Improves, Pertamina Continues to Restore Profits for the End of 2020
Jakarta, August 27, 2020 - The operational performance of PT Pertamina (Persero) as a whole shows a positive trend as we enter the second semester of 2020.
In July 2020, Pertamina recorded a 6.9 million Kiloliters of sales volume for all products, an increase of 5 percent compared to June 2020, which was 6.6 million KL. Meanwhile, in terms of sales value, in July, it was in the range of USD 3.2 billion or an increase of 9 percent from the previous month, which reached USD 2.9 billion.
"One of the shocks experienced during the Covid-19 pandemic was the decline in demand for fuel. However, with the adaptation of new habits and the movement of the national economy, Pertamina's sales trend began to rise. The cumulative performance in July has also progressed and is better than the previous month's cumulative performance," said Fajriyah Usman, Vice President of Corporate Communication of Pertamina in Jakarta (27/8).
According to Fajriyah, the period from February to May 2020 was Pertamina's toughest period with the volume of demand that continued to experience a sharp decline due to the Covid-19 pandemic. During Large-Scale Social Restrictions (PSBB), the decline in demand in big cities reached more than 50%. With the addition of the decline in revenue in the upstream sector, Pertamina's total revenue, which was asserted in the June 2020 Unaudited Financial Report, fell by 20%.
Fajriyah also said that with a significant decrease in income, profits were also depressed. In January 2020, Pertamina still posted a positive net profit of USD 87 million. However, for the next three months, Pertamina began to experience an average net loss of USD 500 million per month.
To overcome this condition, continued Fajriyah, Pertamina's management has succeeded in executing strategies from various aspects, both operational and financial. Therefore, the net income has increased starting from May to July 2020, with an average of USD 350 million per month. This positive achievement will continue to reduce previously recorded losses.
"Starting from May, continuing in July, and going forward, the performance will continue to improve. With the Net Profit (unaudited) in July of USD 408 million. Therefore the cumulative loss can be reduced to USD 360 million or the equivalent of IDR 5.3 trillion. By paying attention to the existing trends, we are optimistic that performance will continue to improve until the end of 2020," she said.
In addition, the performance of Operating Profit and EBITDA also remained positive, so that cumulatively from January to July 2020, it reached USD 1.26 billion, and EBITDA reached USD 3.48 billion. It shows that Pertamina is operating well, including Pertamina's commitment to carry out assignments in the distribution of BBM and LPG to all corners of the country as well as completing national strategic projects such as the construction of refineries.
"Of course, improving performance is not as easy as turning a hand, it takes a process, and it takes time. Now, it can be seen that with the hard work of all management and employees, Pertamina's performance is starting to recover," she said.
On the other hand, Fajriyah also explained the efforts made by Pertamina to improve performance. It includes the efficiency of operational spending (OPEX) by cutting the budget by 30 percent, as well as prioritizing capital expenditure (CAPEX) selectively so that it could be 23 percent more efficient.
"A lot has been done, and we will continue to adapt to current conditions. We are renegotiating contracts, mitigating foreign exchange losses, continuing to carry out operations and investments to maintain upstream production. Along with that, we are also improving marketing strategies with discount programs and customer loyalty to increase revenue, reviewing and improving the operation model of refineries and others," she said.
Pertamina's priority commitment, continued Fajriyah, is providing and giving service of energy for all Indonesian, from the upstream sector to the distribution of BBM and LPG to remote parts of the country, including the One Price Fuel program. The workforce who is directly involved in it also reaches more than 1.2 million people. Despite having to face heavy business pressures throughout the pandemic, Pertamina is trying not layoff (PHK) employees when other global oil and gas companies carry out massive layoffs. Pertamina continues to carry out strategic projects that absorb thousands of workers, such as in the RDMP & GRR refinery construction project and other upstream and downstream infrastructure projects, to build national energy resilience and independence. This extraordinary step is a concrete form of Pertamina as a state-owned company that carries out the mandate and role of driving the national economy and is not only profit-oriented.
Furthermore, Pertamina's contribution to society and the country is well maintained. Apart from continuing to carry out dividend payment obligations, handling the spread of Covid-19 is also a priority. With Pertamina Group's total contribution reaching nearly IDR 900 billion, Pertamina is at the forefront of assisting the community, including building a special Covid-19 hospital and other supporting health facilities. In addition, Pertamina's empowerment of the MSMEs movement also gets a large portion. Therefore, it helps the movement of the small and medium-sized economy to survive amid difficult conditions.**