Medco Energi International (MEDC IJ)

1H26 Preview: Solid Volume, Firm Oil Prices & AMMN Contribution to Drive Earnings Rebound

 

  • 2Q26 O&G output stayed strong at 171 mboepd (+1.2% q-q; +18.2% y-y), with key projects on track.
  • Expect 2Q26 earnings to rebound on firmer prices and AMMN contribution
  • Maintain Buy rating TP Rp2,200, with solid operations and firm oil prices; risks remain on prices and AMMN ramp-up.   

 

Operational Performance Remained Strong in 1H26

MEDC recorded 1H26 O&G production of 170 mboepd (+18.9% y-y), reaching the upper end of its FY26F guidance. 2Q26 production also improved to 171 mboepd (+1.2% q-q), driven by higher oil and gas output. Power sales rose to 2,323 Gwh (+16.5% y-y), supported by the ELB expansion, Ijen Geothermal, and East Bali Solar PV. On the development front, Senoro Phase-2A reached full onstream in Jun-26, while Bualuang Renewal Plan Phase-1 added ~2,000 bopd gross production in 2Q26. Looking ahead, Sambar development remains on track for partial onstream in 4Q26F, with peak production targeted at ~85 mmscfd gross.

 

2Q26F / 1H26F Earnings Preview

We expect 2Q26F earnings to accelerate, supported by higher realized oil and gas prices, sustained production and higher contribution from AMMN as its smelter ramp up. We estimate 2Q26F revenue at US$804.5mn (+20.4% q-q; 39.2% y-y), bringing 1H26F revenue to ~US$1.47bn (+29.4% y-y). We assume oil lifting of 48 mbopd and gas lifting of 633.6 mmscfd, with oil ASP rising to US$97/bbl and implied gas price to US$5.68/mcf. Accordingly, we forecast 2Q26F EBITDA at US$492mn (+41.0% q-q), while net profit is estimated at US$149mn (+122 .2% q-q; +661.7% y-y), supported by an estimated US$52.6mn contribution from AMMN’s smelter ramp-up. This should bring 1H26 net profit to an estimated ~US$216mn (+148% y-y), or 56% of our FY26F estimate.

 

Maintain Buy rating with unchanged TP of Rp2,200.

We maintain our Buy rating on MEDC with unchanged our SOTP-based TP of Rp2,200. We remain positive on MEDC’s earnings outlook, supported by solid O&G operations and a favorable oil price environment. Brent has remained elevated, reaching ~US$100/bbl since Jul26, while the US Strategic Petroleum Reserve has declined to ~286mn barrels, its lowest level since Nov82, potentially supporting tighter oil market conditions. Key risks to our view include lower-than-expected oil prices, weaker production delivery, project delays, higher cash cost, and a slower-than-expected AMMN smelter ramp-up.

 

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