Jakarta. Energi Mega Persada (ENRG), the oil and gas arm of Bakrie Group, is set to launch a $12 million (Rp 192.2 billion) share buyback program, which will be presented for approval at an Extraordinary General Meeting of Shareholders (EGMS) scheduled for Jan. 24, 2025.

The buyback aims to enhance shareholder value by reducing the number of outstanding shares, thereby increasing earnings per share (EPS). 

The company stated in its disclosure to the Indonesia Stock Exchange (IDX) Thursday that the move reflects confidence in its fundamental performance, which has not been fully reflected in the current stock price. ENRG shares fell by 2.52 percent to Rp 232 following the announcement.

The buyback will take place gradually on the Indonesia Stock Exchange (IDX) over the next 12 months, with the program capped at 10 percent of the company’s paid-up capital. However, the company will ensure that the circulating shares remain at least 7.5 percent of the total capital in accordance with regulations.

The funds for the buyback will be entirely sourced from the company’s internal cash reserves, without relying on external financing. ENRG said the buyback will not materially affect its liquidity or operations. Along with boosting EPS, the repurchased shares may be used for equity-based funding or long-term incentives for employees and management, further strengthening the company’s position in the eyes of investors.

For the first nine months of 2024, ENRG reported a net profit of $51.27 million, a 12 percent increase from the previous year’s $45.69 million. The company’s net sales grew 8 percent to $319.66 million, compared to $296.39 million in the same period last year, while EBITDA rose by 3 percent to $180.53 million. Despite this positive performance, ENRG recorded a cumulative loss of $399.51 million by the end of September 2024, a reduction from the $450.79 million deficit at the same point in 2023.