Sunindo Pratama Secures $7.4M Profit as Tubing Demand Buffers Revenue Squeeze

JAKARTA, Investortrust.id — Integrated oil and gas piping manufacturer PT Sunindo Pratama Tbk (SUNI) booked a resilient net profit of Rp 118 billion ($7.42 million) in the third quarter of 2026, navigating a double-digit top-line contraction as strong core product deliveries cushioned margins.

Consolidated operating revenue contracted 26% year-on-year to Rp 529 billion ($33.27 million) for the three months ended Sept. 30, 2026, retreating from Rp 715 billion ($44.97 million) in the prior-year period. The revenue drop was primarily caused by declining sales of Oil Country Tubular Goods (OCTG) casing, though steady demand for the company’s higher-margin OCTG tubing line helped stabilize corporate profitability.

Upstream energy service providers in Southeast Asia are facing a delicate transition as governments tighten domestic content rules and invite new local suppliers into state energy supply chains. For Sunindo Pratama, maintaining substantial bottom-line margins and accelerating specialized factory certifications under the American Petroleum Institute allows the company to defend its market share in complex premium tubing while structural realignments play out in basic casing tenders.

Casing Headwinds Offset by Core Tubing Demand

The contraction in third-quarter revenue stemmed from changing market dynamics within the domestic OCTG casing segment. The arrival of new domestic producers capable of supplying casing products led to updated tender qualifications under the government’s Local Content Requirement (TKDN) regulations, temporarily constraining the company's participation.

"Currently, SUNI is evaluating these local producers, which has temporarily prevented the company from participating in tenders held by upstream oil and gas production sharing contractors," Sunindo Pratama President Director Willy Johan Chandra said in an official statement on Friday, Oct. 30, 2026. "Despite these challenges in OCTG casing, sales of our core OCTG tubing remained stable and well-protected, underpinned by SUNI’s position as a domestic pioneer in tubing manufacturing."

Cash Flow Surges as Balance Sheet Bolsters Expansion

Underlying liquidity strengthened over the quarter despite top-line pressure. Net cash generated from operating activities advanced 61% year-on-year to Rp 167 billion ($10.50 million), up from Rp 104 billion ($6.54 million) a year earlier, driven primarily by lower cash disbursements to suppliers.

Total equity expanded 11% to Rp 956 billion ($60.13 million), absorbing a Rp 25 billion ($1.57 million) cash dividend distributed to shareholders on July 24, 2026. The company maintained a conservative leverage profile, posting a debt-to-equity ratio of 0.26 times, well below its bank covenant limit of 2.5 times.

Cash outflows from financing activities totaled Rp 52 billion ($3.27 million), allocated toward bank debt amortizations and dividend obligations without drawing down new bank borrowings. Sunindo Pratama Finance Director Freddy Soejandy noted that improving financial flexibility will comfortably fund the remaining capital expenditure required to bring new manufacturing assets into service.

Batam Plant Awaits American Petroleum Institute Clearance

The company directed Rp 95 billion ($5.97 million) in capital expenditure during the quarter toward the completion of its second manufacturing plant under subsidiary PT Rainbow Tubulars Manufacture (RTM) in Batam, Riau Islands.

Physical construction and initial trial runs have concluded successfully, and the facility is undergoing formal audit reviews by the American Petroleum Institute (API) to secure the licenses required for commercial operations.

Sunindo Pratama Operational Director Bambang Prihandono confirmed that production teams in Batam are working closely with auditors to finalize the verification sequence. Management expects to secure API licensing during the final quarter of 2026, enabling commercial operations to commence before year-end to capture growing domestic oil and gas tubing demand.