Daily Brief Credit: Medco Energi – Earnings Flash – H1 FY 2022 Results – Lucror Analytics and more

Medco Energi’s H1/22 results were strong as expected. This was supported by increased production following the ConocoPhillips Indonesia (CIHL) acquisition in March, as well as the high oil-price environment. We expect the company to deleverage further going forward, supported by earnings growth, strong OCF generation and debt repayments. The full-year FCF deficit should also narrow to a mildly negative level. We note positively management’s intentions to reduce debt, including to fully repay the USD 850 mn in debt taken on for the CIHL acquisition by 2024. Cash/ST Debt was inadequate, but we do not foresee any near-term refinancing risks.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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