Company Coverage
Elnusa (ELSA IJ): Seismic Business To Boost 2H26 Earnings
BUY (Maintained)
Current price:
Target price:
Upside:
Rp675
Rp1,450
+114.8%
Analyst
Analyst
Highlights
- Seismic business to be recognised as revenue in 2H26. The recognition can help boost revenue contribution from the upstream segment.
- 1H26 growth was driven by the logistics segment. With this growth, ELSA plans to add 48 fuel tankers to support the higher demand in 2H26.
- Maintain BUY with a target price of Rp1,450.
Analysis
- Expect a stronger 2H26. Several projects incurred mobilisation and preparation costs in 1H26, while revenue will only be recognised once the
relevant contractual milestones are achieved. This timing mismatch weighed on upstream margins, particularly in seismic projects, which typically have a two- to three-month lag between the recognition of mobilisation costs and invoicing once recording activities commence. The remaining seismic backlog exceeded Rp1t, comprising both offshore and onshore projects, including Kendahulu, Merak Corridor, Manggar or Juata, and Tedong. Some prospective projects could be converted into contracts in 2H26, while others are expected to commence in 2027. Meanwhile, growth in the downstream business was supported by higher fuel transportation demand outside Java, particularly in Kalimantan and Sumatra, as well as stronger industrial and marine fuel trading. To support the expected increase in demand during 2H26, Elnusa (ELSA) plans to add 48 fuel tankers.
- Growth initiatives include chemical EOR, fuel infrastructure and international expansion. ELSA began chemical enhanced oil recovery
(EOR) activities at the Rama field in Jun 26, while the company is also developing the Palaran fuel terminal and Kolaka LPG terminal. International expansion will focus on Algeria and Libya, India and Southeast Asia.
Masela participation. ELSA expects to support the Masela project through drilling-related services, wireline logging, cementing, perforation and
production testing, subject to project requirements and coordination within the Pertamina group. Following injection at the Rama field, ELSA to support Pertamina Hulu Rokan at Minas Area D that started onstream on Jul 26. Additional opportunities are being considered at other Pertamina fields, supported by ELSA's polymer injection equipment and chemical supply capabilities.
Highlights
- Seismic business to be recognised as revenue in 2H26. The recognition can help boost revenue contribution from the upstream segment.
- 1H26 growth was driven by the logistics segment. With this growth, ELSA plans to add 48 fuel tankers to support the higher demand in 2H26.
- Maintain BUY with a target price of Rp1,450.
Analysis
- Expect a stronger 2H26. Several projects incurred mobilisation and preparation costs in 1H26, while revenue will only be recognised once the
relevant contractual milestones are achieved. This timing mismatch weighed on upstream margins, particularly in seismic projects, which typically have a two- to three-month lag between the recognition of mobilisation costs and invoicing once recording activities commence. The remaining seismic backlog exceeded Rp1t, comprising both offshore and onshore projects, including Kendahulu, Merak Corridor, Manggar or Juata, and Tedong. Some prospective projects could be converted into contracts in 2H26, while others are expected to commence in 2027. Meanwhile, growth in the downstream business was supported by higher fuel transportation demand outside Java, particularly in Kalimantan and Sumatra, as well as stronger industrial and marine fuel trading. To support the expected increase in demand during 2H26, Elnusa (ELSA) plans to add 48 fuel tankers.
- Growth initiatives include chemical EOR, fuel infrastructure and international expansion. ELSA began chemical enhanced oil recovery
(EOR) activities at the Rama field in Jun 26, while the company is also developing the Palaran fuel terminal and Kolaka LPG terminal. International expansion will focus on Algeria and Libya, India and Southeast Asia.
Masela participation. ELSA expects to support the Masela project through drilling-related services, wireline logging, cementing, perforation and
production testing, subject to project requirements and coordination within the Pertamina group. Following injection at the Rama field, ELSA to support Pertamina Hulu Rokan at Minas Area D that started onstream on Jul 26. Additional opportunities are being considered at other Pertamina fields, supported by ELSA's polymer injection equipment and chemical supply capabilities.
BUY (Maintained)
Current price:
Target price:
Upside:
Rp675
Rp1,450
+114.8%
Analyst
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
