Perusahaan Gas Negara (Persero) - Phillip Capitalinternetfileserver.phillip.com.sg/POEMS/Stocks/.../ID/PGAS20141219.pdfPerusahaan Gas Negara (Persero) ... other two oil & gas fields

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MCI (P) 019/11/2014_0013 Ref. No.: INDO2014_0018

Perusahaan Gas Negara (Persero) (PGAS ID)

Domination in Gas Infrastructures

INDONESIA | INFRASTRUCTURE | INITIATION

19 December 2014

Company Overview

PGN is a dominant player in the transportation and distribution of natural

gas, connecting Indonesia's natural gas supplies with customers across

the country. PGN currently has two business models: Distribution and

transmission.

Strong Demand for natural gas amid limited gas supply

In 2015, demand for natural gas is expected to reach 9,613mmscfd or

increased by 12.5% from this year. Export contracts are projected to

decline gradually and supply of gas will only focus to fulfill domestic

demand. This projection based on government’s roadmap national gas

policy. Limited gas supply is the biggest threat for PGN as its core

business is distribution of gas (midstream). PGN is highly dependent on

upstream gas supply.

Improving distribution & transmission infrastructure

Currently PGN is developing the construction of the Kalimantan-Java

(Kalija) gas network with total length of approximately 1,200km. We

expect PGN’s distribution capacity to increase 20% after Kalija pipeline

network begins to operate at the end of 2017. Also, PGN FSRU Lampung

commenced commercial operations and entered the final commissioning

phase. Until this project starts to operate we expect gas distribution

volume to slightly increase by 5% to 908mmscfd and transmission volume

to 880mmscfd FY15.

Aggressive in acquiring oil & gas field

Revenue from upstream business in FY14E increased by more than 300%

after PGN acquired the remaining 75% stake in Pangkah PSC and 36% full

participating interest in Fasken Eagle Ford shale properties in South

Texas, USA. Ketapang field is expected to start production in 2015 and

could contribute 20% addition to PGN’s upstream business revenue. The

other two oil & gas fields are Bangkanai with 30% working interest, which

is still under development and South Selulu with 100% working interest

and currently in exploration status.

Key Triggers and Recommendation

PGN is expected to give strong earnings with the assumption distribution

volume could increase at least 20% by FY17 as Kalija pipeline network

starts to operate and 20% addition to revenue from upstream as

Ketapang field will be fully producing. Net income margin in FY15-FY16E is

expected to be stable at 19%. We initiate coverage on PGAS with

‘Accumulate’ rating and target price of IDR 6,575. At current price, the

stock is traded with FY15 P/E of 17.7x

ACCUMULATE CMP IDR 5,850

TARGET IDR 6,575 (+12.4%) COMPANY DATA

O/S SHARES (MN) : 24,239

MARKET CAP (IDR BN) : 140,590

MARKET CAP (USDBN) : 11.81

52 - WK HI/LO (IDR) : 6,255 / 4,120

AVG. VOLUME 3M (MN Share) : 17.65

PAR VALUE (IDR) : 100

MAJOR SHARE HOLDER, %

GOVERNMENT : 56.97

PUBLIC & OTHERS : 43.03

PRICE VS. JCI

Source: Phillip Securities Indonesia Research

KEY FINANCIALS

FYE Dec FY14 FY15E FY16E

Revenue (USDmn) 3,306 3,501 3,836

NI, adj (USDmn) 631 672 735

EPS, adj (USD) 0.026 0.028 0.030

P/E (X) 18.9 17.7 16.2

BV (USDmn) 3,048 3,335 3,648

P/BV (X) 3.9 3.6 3.3

DPS (USD) 0.016 0.017 0.018

EV/EBITDA 9.69 9.14 8.41

Debt/Equity 59.8% 70.5% 61.5%

ROE 20.7% 20.1% 20.1%

ROA 11.4% 10.5% 11.2%

Source: Phillip Securities Indonesia Research Est.

Valuation Method: Discounted Cash Flow

Analyst Phillip Research Team (+65 6531 1240) [email protected]

PHILLIP SECURITIES INDONESIA | 2 | P a g e

PERUSAHAAN GAS NEGARA (PERSERO) INITIATION

Investment Thesis

Our investment thesis for PGN is based on the relatively strong

bargaining power as gas distributor, positive development on gas

infrastructure, and government policy to convert gasoline to gas which is

expected to provide a significant boost to the company’s earnings.

However, higher financing cost due to BI rate hike, rupiah depreciation,

and higher purchase price of gas from suppliers since April 2013 have

prompted the rise of finance cost and revenue cost. In FY14 we expect

EPS to remain weak due to hike in finance cost of 323% after PGN

issuing obligation of USD 1.35 billion and for FY15 net income is

expected to grow by 6% to USD 671.56 million from USD 631.13 million

in FY14. The completion of gas infrastructure and the commencement of

upstream asset production could boost company revenue by at least

20% in FY17. PGN is expected to maintain its distribution margin of USD

4.2-4.5/mmbtu to offset higher purchase price. As such, EPS FY15-

FY16E will grow by 6%-9%. DER in FY15-FY16E to remain below 0.8x as

PGN frequently uses internal cash to improve its gas infrastructure. ROE

to stay stable at 20% and ROA at 11% in FY15E. Dividend yield to grow

at CAGR 8.9% in FY14-FY16E.

Table head (USD mn) FY15E FY14E YoY, %

Net sales 3,501 3,305 5.93 Total operating expenses 2,511 2,370 5.94 EBITDA 1,381 1,258 9.77 EBITDA margin, % 39 38 2.63 Depreciation 391 323 21.05

EBIT 990 934 5.99

EBIT margin, % 26 26 0 Interest paid 93 93 0 Other income 28 27 3.70 Pre-tax profit 925 869 6.44 Tax rate, % 25 25 0 Profit after tax, net minority interest 671 631 6.44

EPS, adj. IDR 330 310 6.45

Source: Company, PSI Research

Valuation Methodology

FY14E FY15E FY16E FY17E FY18E FY19E FY20E

Beta 0.63 0.63 0.63 0.63 0.63 0.63 0.63

Cost of equity (%) 15.65 15.65 15.65 12.50 12.50 12.50 12.50

Cost of debt (%) 5.08 3.94 4.47 4.70 4.75 4.96 5.20

WACC (%) 11.22 10.40 10.97 9.39 9.70 10.02 10.33

PV of cash flow (USD mn) (315) (43) 337 470 528 576 586

Terminal value (USD mn) 11,998

Total PV of cash flow USD mn) 2,138

Total value (USD mn) 13,393

Value/share (USD) 0.55

Value/share (IDR) 6,575

Outstanding shares (mn) 24,240

*)USD 1 = IDR 11,900

Source: Company, PSI Research

Net income is still weak but after the

completion of gas infrastructure and

upstream assets begin to produce,

revenue could grow by 20%.



Strong demand for natural gas amid limited gas supply

Indonesia has large reserves of natural gas. Currently, the country has

the third-largest gas reserves of the Asia Pacific region (after Australia

and China), accounting for 1.6% of total global gas reserves according

to BP Statistical Review of World Energy 2014.

The Ministry of Energy and Mineral Resources believes that the potential

gas reserves in Indonesia could last 50 years, with gas reserve reaching

150 TSCF and production per year to reach 2.87 TSCF. However, this

does not mean that domestic gas production could meet domestic

demand. In fact, there is a shortage of gas for domestic industries in

Indonesia. The government of Indonesia aims to limit the country's gas

exports in an attempt to ensure sufficient domestic supplies while

encouraging the use of natural gas as a fuel source for industrial and

household consumption.

Source: Ministry of Energy and Mineral Resources

Indonesia's gas production has always been directed towards export

markets, resulting in the need to import LNG from abroad in order not to

disturb export commitments. However, the decline in domestic oil

production in combination with uncertainty of international oil price

prompted the government to make efforts to enlarge domestic uses of

gas. In recent years domestic usage of gas has risen robustly due to

exports reduction but limited infrastructural facilities in Indonesia i.e.

transmission and distribution pipeline networks could slow further

development of domestic consumption.

Gas Demands (mmscfd) 2014 2015 2016 2017 2018 2019 2020

Potential demand 34 220 308 419 560 974 1,187

Export (committed) 156 195 32 229 521 522 521

Domestic (committed) 1,346 1,863 2,303 2,586 3,774 4,315 4,824

Export (contracted) 3,409 2,711 2,537 2,444 2,013 1,977 1,895

Domestic (contracted) 4,549 4,624 4,275 4,130 3,282 2,746 2,466

Existing supply 6,764 6,658 6,318 5,694 5,197 4,476 3,771

Project supply 206 910 1,571 2,231 3,124 3,910 4,084

Source: Special Task Force for Upstream Oil and Gas (SKK Migas)



As shown above, domestic demand (contracted + committed) is

estimated to grow at CAGR 3.1% over 2014-2020 period, while the

supply side (existing + project) to only grow at CAGR 1.7%. The

demand for export to decline and offset domestic demand. The main

export destinations of Indonesian LNG are Japan, South Korea and

Taiwan. Demand for natural gas will continue to grow along with

demand for electricity, because industrial and power plant companies

are PGN’s main customers with more than 90% contribution to its total

volume. Indonesia’s electricity demand will rise by 5%-10% per year,

according to Ministry of Energy and Mineral Resources.

Indonesia's expanding economy in combination with the government's

intention to lower the country’s reliance on oil as a prime source for

energy supply for industries, power generation and transportation will

spur domestic demand for gas in the future. But in order to reach an

efficient and productive gas sector, large-scale investments in both

exploration and infrastructure such as pipeline network will be needed.

Also, a clear and supportive regulatory system and legal framework are

required to gain investors confidence.

PGN as dominant player in distribution of gas is active in expanding its

pipeline network. Also, PGN continues to secure new resources of energy

to ensure security of supply for its customers and to prevent gas

shortages in a number of regions.

Source: Special Task Force for Upstream Oil and Gas (SKK Migas)

Domestic demands (contracted + committed) to grow at CAGR of 3.1% in FY14-FY20E.



Improving distribution & transmission infrastructure

PGN distribution business activities cover Java, Sumatra and Batam

islands. To develop the effectiveness and efficiency of gas distribution,

PGN splits its business coverage into three Strategic Business Unit (SBU)

areas or Sales and Services Areas. With these SBUs, PGN not only

improve services to customers, but at the same time accelerate market

penetration and expansion. PGN has three SBU:

1. SBU I: West Java, which includes Jakarta, Banten, West Java

province, South Sumatra, and Lampung.

2. SBU II: East java, which includes Surabaya, Gresik, Sidoarjo,

Mojokerto, Pasuruan, Probolinggo, and Pasuruan.

3. SBU III: North Sumatra, which includes Batam, Pekan Baru, and

Dumai.

PGN, as main player in gas distribution industry, has natural gas pipeline

network stretching more than 6,000km long, representing 70% of all

gas pipelines in Indonesia. The competitor for PGN is Rukun Raharja

(RAJA) and Pertagas.

RAJA started this business in 2010 by acquiring Panji Raya Alamindo and

Triguna Internusa Pratama a distribution and transmission company.

Before the acquisition, RAJA was a small company with total asset of

IDR 70 billion in 2009 but after the acquisition its total asset jumped to

IDR 902 billion in 2012. RAJA has pipeline network of 174 km mainly in

Jambi, Banten, and West Java province with average volume rate of

28mmscfd.

Pertagas is a subsidiary of Pertamina which is also engages in the

distribution of natural gas with pipeline network of approximately

1,500km. Currently Pertagas is developing 350km-long Arun Belawan

pipeline network to channel Arun block in Aceh to PLN power plant in

Belawan, North Sumatra. This pipeline could deliver natural gas of

300mmscfd.

PGN Pipeline

Source: Company



In line with the Government’s efforts to continue improving the

allocation of domestic natural gas, through the Minister of Energy and

Mineral Resources’ Decree No. 2700 K/11/MEN/2012, the Government

decided to build Kalimantan-Java (Kalija) pipeline gradually. The

operator is PT Kalimantan Java Gas (KJG), a collaboration between PGN

and Bakrie Group, of which 80% stake is owned by PGN, and the

remaining 20% is owned by Bakrie & Brothers.

Kalija Phase I pipeline project (Kalija I) is submarine gas pipeline to

deliver gas from the Kepodang field in the Muria offshore block in

Jepara, Central Java to the Tambak Lorok power plant in Semarang,

Central Java, through a 200-kilometer pipeline. Kalija I is expected to be

ready to deliver gas to the power plant beginning in August 2015, with

capacity of 200mmscfd. Gas distribution in Central Java is divided into

three corridors: Corridors I, 48km-long pipeline covering Semarang,

Kendal, and Demak. Corridors II, with 34km-long pipeline covering

Ungaran region. Corridors III, 235km-long pipeline covering Solo,

Pekalongan, and Pati. Construction of these pipelines is part of the

government’s efforts to prepare for energy crisis, which has the

potential to hit Central Java in 2017.

Kalija Phase II pipeline project (Kalija II) will connect Kepodang, Central

Java, to Bontang, East Kalimantan, through 1000km pipeline. The total

investment for this project is USD 1.7 billion. KJG sets Gas

Transportation Agreement (GTA) tariff of USD 4.61/mmbtu and toll fee

of USD 0.37/mmbtu.

Indonesia Gas pipeline

Source: Ministry of Energy and Mineral Resources

Other than the Kalija project, PGN also develops Floating Storage

Regasification Unit (FSRU) in Lampung, South Sumatra, with capacity up

to 1.8 million tons of liquefied natural gas (LNG) per year. This FSRU

has a capacity send out rate of LNG to 240mmscfd. FSRU Lampung is

currently in commissioning phase. FSRU Lampung is the second FSRU

operated by PGN. The first one is FSRU Jawa Barat owned by Pertamina

(60%) and PGN (40%) with capacity of 3 million tons of LNG per year,

-----: Planned

___: Existing



equivalent to the distribution of 400mmscfd to be used for electricity

generation at Muara Karang and Tanjung Priok, Jakarta.

FSRU development is the answer to distribution stumbling block for

archipelagic state such as Indonesia. PGN FSRU development is a basic

milestone in the development of natural gas infrastructure in Indonesia.

This is in accordance with the ideals of PGN “into the age of the pipeline

and beyond”. Gas supply mainly comes from East Indonesia (Tangguh

LNG refinery, Papua), while the majority of demand comes from West

Indonesia (Java and Sumatra). Building pipelines to connect east and

west Indonesia would be uneconomical and technologically challenging,

due to the archipelagic nature of Indonesia. PGN is committed to add

another regasification facility to anticipate the needs of gas in the

future.

Moreover, PGN is prepared to increase the number of gas stations

(SPBG) to support government policy in converting gasoline to gas. The

company could increase the number of gas stations with pipeline

scheme and Mobile Refueling Units (MRU). PGN has identified 73 fuel

stations located near its pipeline in Jakarta area that can be converted

into integrated gas stations, allowing consumers to fill their vehicles with

gasoline or gas. Currently the company operates 14 gas stations, mostly

in Jakarta. In 2015 PGN plans to build additional 16 gas stations in

Jakarta.

Higher petrol price due to subsidy cut will encourage customers to

switch to cheaper natural gas (Gas: IDR 3,100/liter; Regular petrol: IDR

8,500/liter). With wide pricing gap between natural gas fuel and

subsidized oil fuel, natural gas is an appealing energy alternative for

consumers.

Source: Company

For households and micro industries, PGN’s natural gas is more

affordable than LPG, because natural gas is produced domestically, while

LPG is imported. Currently, households and micro industries mostly use

LPG. The stumbling block for PGN to penetrate household market is the

underdevelopment of gas infrastructure.

Natural gas is cheaper than oil fuel (gasoline).



In order to increase the number of household consumers, the company

is currently developing pipeline networks in various areas such as

Batam, Jakarta, Banten, Semarang and East Java to bolster the use of

natural gas for household needs, which is a cheaper source of energy.

The company expected the number of household consumers to increase

by 5,000 households per year.

Power plants lead the domestic industrial consumption by 42% of total

PGN sales, followed by chemical industry with 11% of total sales.

Revenue contribution from household consumers is still very low,

currently below 0.5%. In order to increase household customers, PGN

has signed an agreement with Jakarta provincial government to channel

gas to flats which to be built by Jakarta provincial government. The

company also plans to build CNG cluster in Semarang to reach

household customers.

With these various projects, we expect distribution and transmission

volume to increase by 20% in 2015. The distribution volume is

estimated to grow at CAGR 9% in FY15-FY20E, compared to CAGR of

1.5% in FY09-FY14A.

Source: PSI Research Estimates

Source: Company




Distribution of natural gas contributes more than 90% of total revenue

in FY09-FY13. But contribution from the distribution business in FY14-

FY20E is estimated to decline to below 87%, due to higher revenue

contribution from upstream business. This decline showed us that PGN

has another source of revenue besides distribution and transmission.

The upstream business could also help in lessening dependency to

suppliers, because if supplies are low, the upstream business would be

able to make up for gas shortages.

The biggest supplier for PGN is ConocoPhillips with more than 40% of

total gas purchase and Pertamina with 25% of total gas purchase. Since

2013 ConocoPhillips and Pertamina increased their gas selling price.

ConocoPhillips with 203% hike from USD 1.85/mmbtu to USD

5.6/mmbtu and Pertamina increased by 141% from USD 2.23/mmbtu to

USD 5.5/mmbtu. This condition brought PGN revenue cost to increase

by 41% in 2012-2013. PGN also increased its average selling price by

55% to offset the purchase price. For FY15 PGN is expected to maintain

its fixed margin of USD 4.2-4.5/mmbtu.

Source: Company



Aggressive in acquiring oil & gas fields

Besides continuing to develop distribution networks, PGN also supports

domestic gas supply through its subsidiary Saka Energi Indonesia (SEI),

which has acquired oil and gas fields. PGN’s aggressive steps to acquire

a number of oil and gas blocks are an attempt to enrich its experience in

the upstream oil and gas business. Such experience can be obtained by

starting with the role as a minority shareholder in a block. The company

strategy is by targeting oil and gas blocks that will be out of contract or

be discarded by foreign contractors. By doing so, it is easier for PGN to

acquire oil and gas blocks when it is sold through pre-emptive rights.

Asset

Working

Interest

(%)

Operator Status Contract Commercial Reserve

Volume %Gas

Pangkah

(Indonesia) 100 Saka Energi Indonesia Production 2026 62 MMBOE 54

Ketapang

(Indonesia) 20 Petronas Development 2028 17 MMBOE 17

Bangkanai

(Indonesia) 30 Salamander Energy Development 2033 7 MMBOE 92

South Selulu

(Indonesia) 100 Saka Energi Indonesia Exploration 2031 71 MMBOE 82

Fasken (Texas,

USA) 36 Swift Energy Production 87.6 BCF 99

Source: Saka Energi Indonesia

In January 2014, SEI acquired the remaining 75% participating interest

in Pangkah, with transaction value of USD 650 million from Hess. Now

SEI holds 100% ownership in Ujung Pangkah, which has 27 active wells

with total production rate of 14mboed.

The Fasken field is located along the western border of Webb County in

South Texas core area of operations and produces from the Eagle Ford

shale formation with 58 proved undeveloped wells, which almost all is

for natural gas. SEI and Swift agreed to fully develop the 8,300-acres

Fasken field Eagle Ford shale properties. Until 3Q14, they have eight

wells at Fasken and currently completing four more wells.

Initial Production Rates

Well Name Natural Gas

(mmcf/d)

Total Production

(boe/d)

Fasken AB 9H 17.5 2,919

Fasken BCD 10H 23.1 3,849

Fasken BD 14H 20.6 3,435

Fasken BD 15H 22.5 3,745

Fasken BD 16H 23.3 3,887

Fasken BD 17H 21.4 3,571

Fasken BD 18H 20.2 3,374

Fasken BD 19H 22.4 3,734

Source: Swift Energy

Those eight Fasken wells have all been high rates well with average

initial production in excess of 20mmcfd. This achievement has brought

Eagle ford dry gas production from 23mmcfd in mid 2013 to



103.8mmcfd in 2Q14, a 367% increase. Pangkah and Fasken has

contributed oil and gas revenue for PGN from USD34.84 million in FY13

to USD 241.29 million in FY14E, a 592% increase and CAGR of 103% in

FY13-FY15.

The Ketapang PSC is operated by Petronas Carigali, covering an area of

885km2 and is located in the East Java Sea immediately north of

Madura Island. The Bukit Tua field is expected to produce approximately

22.8mmboe of oil and 70bcf of gas during the first five years of

production. Production from the field is expected to start in early 2015.

The field is estimated to contain recoverable reserves of 65mmboe of oil

and 110bcf of gas.

The 3,133km2 South Selulu PSC was acquired by PGN also from Hess in

2013. In acquiring South Selulu block, PGN was only required to commit

in the form of debt repayment and to continue the drilling of the wells

abandoned by Hess. Currently South Selulu block is still in exploration

phase.

In May 2013, SEI acquired a 30% interest in the Bangkanai PSC in

Central Kalimantan from Salamander Energy plc. The group is currently

developing Kerendan field in area of 1384 km2 in Central Kalimantan

with total reserve of 280bcf, of which 120bcf or 20mmscfd of gas has

been contracted for sale to the State Electricity Company (PLN) to

supply to a newly built power plant 3km away from the field.

Source: Salamander Energy

Besides Kerendan field, the group is also exploring West Kerendan, a

twin to the main Kerendan field. Salamander Energy can confirm that

gas has been encountered in four zones: Middle Miocene sandstones,

Oligocene Upper Berai and Lower Berai formation carbonates and the

Eocene Tanjung formation sandstones. The Upper berai of West

Kerendan contains recoverable gas in the range of 133bcf–682bcf with a



mid-case assessment of 313bcf, according to Salamander’s reserves

auditor. This is in addition to the certified resource of 280bcf in

Kerendan field currently under development. The company management

estimates an additional 50bcf of recoverable gas to be available from the

lower gas column, which has been successfully tested. This achievement

could bring significant upside potentials to Salamander and of course to

PGN as owner of 30% participating interest.


SWOT Analysis

Strength Weakness

1. Rapidly growing upstream oil and gas

segment

2. Domination in gas infrastructure

3. Strong bargaining power

4. Strong cash position in the balance sheet.

5. A low-debt company.

1. Lack of experience in upstream oil and gas

industry.

2. High cost of revenue

3. Dependency on gas suppliers

Opportunity Threat

1. The majority of upstream assets is currently

on development phase

2. Undergoing various projects of gas

infrastructures

3. Government gasoline-to-gas conversion

program to benefit PGN.

1. Depleted supply of gas

2. Unsuccessful drilling projects return dry-

holes

3. Slow development of gas infrastructures

4. Higher gas purchase price from suppliers.



FYE Dec (USD mn) 2013 2014F 2015F 2016F

Valuation Ratios

P/E (X) - 18.72 17.74 16.22

P/E (X). Adj 18.49 18.88 17.74 16.22

P/B (X) 4.37 3.91 3.57 3.27

EV/EBITDA (X), adj 10.31 9.61 9.06 8.34

Dividend Yield 4.25% 3.18% 3.38% 3.70%

Per Share data (USD)

EPS, reported 0.036 - - -

EPS, adj. 0.027 0.026 0.028 0.030

DPS 0.019 0.016 0.017 0.018

BPS 0.113 0.126 0.138 0.151

Growth

Revenue 16.3% 10.7% 5.9% 9.6%

EBITDA -1.9% 16.7% 9.7% 9.1%

EBIT -1.9% 4.8% 5.9% 9.6%

Net Income, adj -3.4% -2.1% 6.4% 9.4%

Margins

EBITDA Margin 43.5% 38.1% 39.5% 39.3%

EBIT Margin 37.3% 26.3% 26.4% 26.4%

Net Profit Margin 28.7% 19.1% 19.2% 19.2%

Key Ratios

ROE (%) 30.7% 20.7% 20.1% 20.1%

ROA (%) 14.8% 11.4% 10.5% 11.2%

Debt / Equity 22.4% 59.8% 70.5% 61.5%

Income Statement (USD mn) 2013 2014F 2015F 2016F

Revenue 3,002 3,306 3,501 3,836

EBITDA 1,307 1,259 1,382 1,507

Depreciation & Amortization 187 324 391 422

EBIT 892 935 990 1,085

Net Finance (Exp) / Income 5 (65) (65) (72)

Associates & JVs 0 0 0 0

Profit Before Tax 897 870 925 1,012

Taxation (231) (217) (231) (253)

Profit After Tax 666 652 694 759

Non-controlling Interest 21 21 22 25

PATMI 645 631 672 735

FYE Dec (USD mn) 2013 2014F 2015F 2016F

Balance Sheet

PPE 2,270 3,195 3,891 4,208

Intangibles 26 57 57 57

Associates & JVs 0 0 0 0

Investments 95 103 103 103

Others 4 0 0 0

Total Non-current assets 2,583 3,357 4,052 4,369

Inventories 15 63 67 74

Account Receivables 316 433 459 502

Investments 85 88 90 93

Cash 1,319 1,564 1,664 1,509

Others 0 0 0 0

Total Current Assets 1,781 2,191 2,323 2,220

Total Assets 4,363 5,547 6,375 6,590

Short Term Loans 300 0 0 0

Account Payables 216 222 235 258

Maturities of long term loans 114 122 122 108

Others 256 216 216 216

Total Current Liabilities 886 559 573 582

Long Term Loans 612 1,822 2,351 2,243

Others 138 117 117 117

Total Non-current Liabilities 750 1,939 2,468 2,360

Share Capital 344 344 344 344

Non Controlling Interest 182 198 216 236

Shareholder's Equity 2,727 3,048 3,335 3,648

Cash flow Statement (USD mn) 2013 2014F 2015F 2016F

CFO

Net Income 861 631 672 735

Adjustments 590 (757) (138) 68

Depreciation & Amortization 290 275 352 170

WC Changes (616) 736 119 (112)

Cash flow from ops 1,124 885 1,005 861

CFI

Capex, net (866) (1,200) (1,048) (487)

Others (41) 0 0 0

Cash flow from Investments (1,241) (1,048) (487) (412)

CFF

Share Issuance 0 0 0 0

Loans, net of repayments 612 490 1,019 911

Obligation 0 1,332 0 0

Dividens (506) (379) (403) (441)

Others (522) (843) (473) (999)

Cash flow from financing (416) 600 143 (529)

Net change in cash (248) 244 101 (155)

CCE, end 1,319 1,564 1,664 1,509


PERUSAHAAN GAS NEGARA (PERSERO)

INITIATION

Contact Information (Singapore Research Team) Management Chan Wai Chee (CEO, Research - Special Opportunities)

+65 6531 1231 Research Operations Officer Jaelyn Chin +65 6531 1240

Joshua Tan (Head, Research - Equities & Macro)

+65 6531 1249

Macro | Equities Market Analyst | Equities US Equities Soh Lin Sin +65 6531 1516 Kenneth Koh +65 6531 1791 Wong Yong Kai +65 6531 1685 Bakhteyar Osama +65 6531 1793 Finance | Offshore Marine Real Estate Benjamin Ong +65 6531 1535 Caroline Tay +65 6531 1792 Telecoms | Technology Transport & Logistics Colin Tan +65 6531 1221 Richard Leow, CFTe +65 6531 1735

Contact Information (Regional Member Companies) SINGAPORE

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250, North Bridge Road #06-00 Singapore 179101 Tel +65 6533 6001 Fax +65 6535 6631

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INDIA PhillipCapital (India) Private Limited

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TURKEY PhillipCapital Menkul Degerler

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http://www.kingandshaxson.com/

http://www.kingandshaxson.com/

http://www.phillipusa.com/

http://www.phillipcapital.com.au/

http://www.ashaphillip.net/

http://www.phillipcapital.in/

http://www.phillipcapital.com.tr/

http://www.phillipcapital.in/


PERUSAHAAN GAS NEGARA (PERSERO)

INITIATION

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