3Q18 Projection of Upbeat ASP Bolstering Revenue

Overseeing that global oil and gas prices are on rise, we project that in 3Q18, oil and gas average selling prices (ASP) grew by 5% q-q and 7% q-q, respectively; accordingly, revenue contributed by the oil and gas segment surged by 10% to USD254 million (vs. 2Q18 revenue of USD231 million). Meanwhile, production volume of oil and gas remains flat.

3Q18 Optimism for Increment in Margins

We estimate that MEDC is capable of posting the net profit margin of 16% (vs. the 2Q18’s net profit margin of 7%). Efficiency is a key takeaway for margin growth, e.g. operational cost efficiency at oil rigs and refinancing by issuing medium term note (MTN) of USD67.1 million. It accelerates settlement of bank loan; thus, high credit rates due to hike in FFR and BI 7-Day Repo Rate are avoidable.

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