CLSA Indika Energy (INDY IJ) 1H10 results – weak performance

The company’s net profit increased 28% yoy to Rp467.16bn. It has turned to operating profit of Rp4bn from a loss of Rp36bn a year ago. Kideco's contribution fell 10% yoy though to Rp721.2bn from nearly Rp800bn. Comment: Like its other peers, the result is disappointing, only forming 37% of consensus expectations. Reasons are: 1) weaker operating margins from its contractors business (petrosea and tripatra); 2) lower-than-expected Kideco's profit; 3) higher interest expense.