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Issuer Flash: PT Pertamina Geothermal Energy Tbk

Issuer: Pertamina Geothermal Energy | Document: Issuer Flash | Date: 2026-08-19 | Event: 6m 2026 Results

Report date: 2026-08-19 Event date: 2026-08-05 Event title: 6M 2026 Results

1. Flash Conclusion

PGE's 6M 2026 results are constructive for near-term credit quality. Electricity and steam production increased 13.6% year on year to 2,745GWh, revenue rose 14.7% to US$235.03m, and operating cash flow increased 6.7% to US$132.28m. The operating result confirms that the established geothermal portfolio remained reliable through the first half and that demand and asset performance supported revenue growth. Cash of US$656.63m remained well above the US$400m principal of the April 2028 global green bond.

The update does not resolve the central funding question in the current issuer summary and Q1 flash: how PGE will balance dividends, development capex and the 2028 maturity. Cash declined by US$61.87m from end-2025, principally in the context of a US$123.9m dividend payment and higher investment outflows. The company has not disclosed a bond redemption, refinancing or committed project-funding drawdown plan in this event. The result therefore strengthens the operating starting point but does not justify treating gross cash as a dedicated reserve for the 2028 notes.

2. Operating Performance and Earnings Quality

The 6M presentation shows stronger asset performance across PGE's 727MW own-operated portfolio. Production reached 2,745GWh, up 13.62% from 2,416GWh in 6M2025. The increase reflected better output at Lumut Balai following the June 2025 commercial operation of Unit 2, higher dispatch and steam supply in several operating areas, and operational improvements following scheduled maintenance. The disclosed availability factor was 99.71%, while the outage rate was 0.11%. These metrics are credit-positive because contracted geothermal revenue depends on reliable production and availability rather than on fuel-price pass-through alone.

Revenue increased to US$235.03m from US$204.85m, and EBITDA rose 9.4% to US$184.02m. The lower rate of EBITDA growth relative to revenue is relevant. Gross profit rose 8.1%, while gross margin declined to 55.5% from 58.9% because depreciation increased after Lumut Balai Unit 2 reached COD and other asset additions were capitalized. The company also identified higher manpower, professional-service, permit, depreciation and community-development costs. The first-half result is therefore evidence of stronger revenue and output, but it is not evidence that all additional revenue converted into proportionately higher operating cash flow or free cash flow.

Net income increased 15.5% to US$79.61m. Part of the improvement came from a change in foreign-exchange performance: the company reported a US$5.1m foreign-exchange gain in 6M2026 versus a US$13.4m loss in 6M2025. This supports reported earnings for the period but is less durable than output, availability and contract performance. Credit analysis should consequently emphasize production, EBITDA, operating cash flow and cash retention rather than treating the full year-on-year net-income increase as recurring debt-service capacity.

3. Cash Flow, Dividends and Funding Read-Through

Operating cash flow rose to US$132.28m from US$123.92m in the prior-year period, supporting the conclusion that the production increase translated into cash generation. Investing outflow increased to US$56.60m from US$46.53m, and the presentation reported free cash flow of US$75.68m, down 2.2% year on year. Development expenditure rose 31.5% to US$13.66m, including exploration drilling at Gunung Tiga and infrastructure supporting Lumut Balai Unit 3 development wells. Maintenance expenditure was US$10.16m. These are manageable amounts relative to cash today, but they are an early indication of the capital demands that will grow if the expansion pipeline advances.

The larger movement in cash came through capital allocation. PGE reported a US$123.9m dividend payment in May 2026, and financing cash outflow rose to US$143.19m. As a result, cash and cash equivalents declined to US$656.63m from US$718.50m at end-2025. The decline is not, by itself, a liquidity concern: cash still substantially exceeds the principal of the US$400m 5.15% global green bond due in April 2028, and the balance sheet remains lightly levered on a net-cash basis. It does show why the gross-cash position should not be equated with a ring-fenced bond-repayment reserve. The same funds may be required for operating needs, future capex, distributions, scheduled debt payments and project funding.

The 6M event leaves the earlier Green Book conclusion unchanged. Inclusion of Lumut Balai Units 3-4 and Lahendong Units 7-8 in the stated concessional-funding route can be helpful to the medium-term development program, but the 6M disclosure does not confirm executed on-lending agreements, conditions precedent, pricing, currency, drawdown, sponsor equity or final PPA economics. Nor does it establish whether project financing will change the 2028 bond strategy. For bondholders, the most decision-useful next disclosure is a clear funding hierarchy for cash retention, dividends, project capex and the maturity, rather than a further headline increase in production alone.

The result also does not alter the required distinction between standalone financial capacity and support linkage. The prior report's Fitch context describes a support-linked rating outcome and a lower standalone profile; it is not a legal Pertamina or Indonesian-government guarantee. No new rating action, guarantee, tender, buyback or covenant information was identified in the 6M results presentation.

4. Key 6M Metrics

Metric 6M2025 6M2026 Credit reading
Production 2,416GWh 2,745GWh +13.62% output growth supports contracted revenue and operating reliability.
Revenue US$204.85m US$235.03m +14.73%, driven by stronger production and demand.
EBITDA US$168.19m US$184.02m +9.41%; the company-reported EBITDA margin fell to 78.3%, while the gross-margin reduction was linked to higher depreciation.
Net income US$68.93m US$79.61m +15.48%; includes an improved foreign-exchange contribution.
Operating cash flow US$123.92m US$132.28m +6.74%, positive but slower than revenue growth.
Free cash flow US$77.39m US$75.68m -2.22%, reflecting higher investment outflow.
Cash and cash equivalents US$718.50m at FY2025 US$656.63m Declined after dividends and cash deployment; remains a material liquidity cushion.
Dividend paid Not applicable US$123.90m Central to the cash-retention and capital-allocation assessment.

5. What To Watch Next

6. Sources