TOBA Shifts to Green Energy and Waste Management, Analysts Weigh H1 Performance

JAKARTA, Investortrust.id – PT TBS Energi Utama Tbk, or TOBA, has made 2025 a defining year in its transformation from a coal-focused energy company into a player in renewable energy and environmental services. Despite short-term financial pressure, analysts see the company’s shift as a strategic move with long-term benefits.

The Jakarta-based firm has been gradually moving away from fossil fuels since announcing its carbon neutrality target by 2030. The transition includes divesting coal-fired power plants, investing in mini-hydro and solar power projects, and entering the electric vehicle market.

In a major move this year, TOBA expanded its sustainability portfolio by acquiring two Singapore-based waste management companies—Sembcorp Environment Pte. Ltd. in March and Sembcorp Enviro Facility Pte. Ltd. in May. The total transaction value reached an estimated 414 million Singapore dollars ($310 million). The acquisitions mark TOBA’s entry into the regional environmental services industry.

Analysts Welcome Strategy, Note Short-Term Financial Hit

Analysts have largely welcomed TOBA’s transformation, which shifts the firm away from the cyclical and volatile coal sector. Rudy Setiawan, analyst at MNC Sekuritas, emphasized that waste management is not just about disposal—it also holds potential for energy generation.

He expressed optimism that the forthcoming revision of Indonesia’s Presidential Regulation on waste-to-energy could formalize pricing and integrated payment systems. “Waste management is no longer just about reducing waste—it’s about producing energy,” Setiawan said. “If the new regulation sets clear pricing mechanisms and integrated billing systems, companies like TOBA could benefit significantly.”

Setiawan pointed to Sembcorp’s proven model in Singapore, which includes integrated services from waste collection to payment systems. With Indonesia facing a mounting waste crisis and a national policy focus on environmental priorities, he believes the model could be replicated domestically.

Following the consolidation of the Singapore acquisitions, TOBA’s waste management segment contributed 35% of total revenue and 65% of gross profit in the first half of 2025. According to Setiawan, this demonstrates a higher profit margin and faster value creation compared to its legacy coal business.

Coal Exit Impacts Revenue and Earnings

However, the strategic pivot has weighed on the company’s short-term financials. TOBA’s coal sales declined sharply, dragging down overall performance. Consolidated revenue for the first half of 2025 fell 31% year-on-year to $172 million. The company posted a net loss of $115.3 million, reversing a net profit of $40.5 million in the same period last year.

Coal sales volume dropped from 1.7 million tons to just 0.7 million tons, while the average selling price declined from $83 to $52.9 per ton.

Leonardo Lijuwardi of NH Korindo Sekuritas said the results should be viewed through the lens of corporate restructuring rather than deteriorating fundamentals. “This is not a signal of weakening business prospects, but a necessary adjustment phase,” he said. “Such transitional pain is typical during early-stage transformation across industries.”

TOBA’s coal dependency has now significantly diminished. In H1 2025, sustainable business segments—including EV development and waste management—contributed 36% to total revenue, up from less than 10% previously.

Track Indonesia’s clean energy transformation with real-time market insights and company fundamentals. Analyze TOBA and other green stocks with InvestingPro — enjoy an exclusive discount for Investortrust readers. Click here to access the offer.