FOCUS Indo Tambang Company Update 16 May 2016

Transcription

1 FOCUS XXX Company Update XX XXXXX 213 FOCUS Indo Tambang Company Update 16 May 216 Mandiri Sekuritas Analyst Yudha Gautama Ariyanto Kurniawan Sector : Energy NEUTRAL Current Price Rp8,375 Price Target Rp7,6 (-9.3%) Prev. TP:Rp6, 52-wk range Rp15,55 - Rp4,675 Stock Data Bloomberg Code ITMG IJ Mkt.Cap (Rp bn/us$ mn) 9,463 / 711 Issued Shares (mn) 1,13 Avg. Daily T/O (Rp bn/us$ mn) 13.4/1. Major shareholder Banpu Minerals 65.% Public 35.% EPS consensus (USD Cents) Mansek Cons Diff 216F F F Share price performance 3m 6m 12m Absolute (%) (44.2) Relative to JCI (%) (34.9) Keeping Cost Under Control ITMG booked 1Q16 net profit of USD23mn on better than expected reduction in cost. We revise up our FY16/17 net profit by 12%/6% on higher reduction in our cash cost assumptions vs. coal ASP. Maintain neutral, but increase our TP to Rp7,6 (from Rp6,). Better than expected 1Q16 result. ITMG booked 1Q16 net profit of USD23mn (-39% YoY), accounting for 34%/38% of ours and consensus' estimate. Strong bottom-line result was mainly due to better than expected reduction in production cost. COGS/ton was at USD37.8/ton (-18% YoY, -6% QoQ), mainly caused by better operational efficiency and lower oil price (-42% YoY, -3% QoQ). 1Q16 revenue was reported at USD331mn (-23% YoY, -14% QoQ) mainly due to lower coal ASP of USD47.6/ton (-21% YoY, -1% QoQ) and lower sales volume at 6.9mn tons (-3% YoY, -5% QoQ). SR ratio stood at 8.6x (% YoY, +21% QoQ). Both gross and operating margin stood at 21.% and 11.6% respectively in 1Q16 (vs. 23.1% and 13.9% in 1Q15). Keep focusing on cost. For the rest of FY16, ITMG will continue to focus its effort on keeping cost in check. The company has aimed to optimize SR ratio at 8.x level as well as improve overhaul road connecting Trubaindo and Bharinto. It has FINANCIAL SUMMARY allocated capex of USD24.6mn (64% of FY16 capex) on Trubaindo. We have yet to see any progress on expansionary efforts, but ITMG is actively looking at acquisitions of new coal assets to replenish its existing low reserve as well as putting its foot into the power plant business. Maintain neutral with revised TP Rp7,6. We revise up our FY16/17 net profit by 12%/6% after lowering our cash cost by 8%/7% to USD44/ton and USD45/ton on better than expected cost management while lowering coal ASP by 7%/6% to USD48/ton and USD5/ton respectively. We also lower FY16/17 production volume to 27mn tons (from 28mn tons), in-line with company guidance, but keeping sales volume at 28mn tons. We expect ITMG to bridge the volume shortfall by utilizing its coal stockpile and coal purchase from 3 rd party. Hence, our TP is revised up to Rp7,6 (from Rp6,), based on 8x FY16 P/E (-1.5SD mean). YE Dec (US$ Mn) 214A 215A 216F 217F 218F EBITDA Net Profit Fully-diluted EPS (USD Cents) Fully-diluted EPS growth (%) (2.3) (68.5) P/E Ratio (x) EV/EBITDA (x) P/B Ratio (x) Dividend Yield (%) ROAE (%) Source: Company ( ), Mandiri Sekuritas ( ) Please see important disclosure at the back of this report Page 1 of 5

2 Company Update 16 May 216 ITMG - At a Glance FIGURE 1. SALES BREAKDOWN (3M16) FIGURE 2. COST BREAKDOWN (3M16) South Philippine Taiwan Korea s 3% 3% 7% Thailand 8% Italy 2% Malaysia 1% USA 1% China 21% Others 35% Mining costs 4% India 15% Indonesia 16% Japan 23% Coal transport 5% Royalty 16% Depreciati on 4% FIGURE 3. COAL PRODUCTION AND STRIPPING RATIO FIGURE 4. ASP, COST, AND OPERATING MARGIN mn tons (x) US$/ton Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 25% 2% 15% 1% 5% % production (mn tons) SR (x) ASP (US$/ton) Total cash cost (US$/ton) Operating margin FIGURE 5. EPS GROWTH TREND FIGURE 6. LEVERAGE TREND (Rp) (%) (5) (1) (%) (1) (2) (3) (4) (5) (6) (x) 1, Dec-9 Dec-1 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-8 Dec-9 Dec-1 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 EPS EPS Gr. [RHS] Net Debt/Equity (NDE) Interest Cover [RHS] Please see important disclosure at the back of this report Page 2 of 5

3 Company Update 16 May 216 FIGURE 7. ITMG 1Q16 RESULTS SUMMARY in US$mn 1Q16 1Q15 %YoY 4Q15 %QoQ 3M16 3M15 %YoY % ours % to cons. Revenue % % % 23% 25% COGS (261) (329) -2% (292) -11% (261) (329) -2% 21% 24% Gross profit % 9-23% % 31% 3% Operating expenses (31) (4) -21% (43) -28% (31) (4) -21% 24% 22% Operating profit % 47-19% % 41% 43% Earnings before tax % 8 32% % 35% 39% Net profit % (2) na % 34% 38% Gross margin 21.% 23.1% 23.6% 21.% 23.1% Operating margin 11.6% 13.9% 12.3% 11.6% 13.9% Net margin 7.% 8.8% -5.2% 7.% 8.8% Effective tax rate 31.2% 38.8% 338.3% 31.2% 38.8% Source: Company FIGURE 8. FORECAST CHANGE ITMG 216F 217F In US$mn New Old %change New Old %change Profit & Loss Revenue 1,342 1,449-7% 1,39 1,484-6% COGS 1,116 1,225-9% 1,151 1,244-7% Gross profit % % Operating profit % % Net profit % % Gross margin 16.8% 15.5% 17.2% 16.2% Operating margin 7.9% 6.5% 8.3% 7.3% Net margin 5.6% 4.6% 5.9% 5.2% Production (Mt) % % Sales (Mt) % % ASP (US$/ton) % % Cash cost (US$/ton) % % Source: Mandiri Sekuritas Estimates FIGURE 7. ITMG ROLLING P/E BAND PE (x) 3 ITMG StDev +1 StDev Mean -1 StDev -2 StDev Jan-11 Jun-11 Nov-11 Apr-12 Sep-12 Feb-13 Jul-13 Jan-14 Jun-14 Nov-14 Apr-15 Sep-15 Feb-16 Source: Bloomberg, Mandiri Sekuritas Estimates Please see important disclosure at the back of this report Page 3 of 5

4 Company Update 16 May 216 Indo Tambang Profit & Loss YE Dec (US$ Mn) 214A 215A 216F 217F 218F Revenue 1,943 1,589 1,342 1,39 1,456 Gross Profit Oper. Profit EBITDA Net Interest Interest Expense (1) (1) (1) (1) (1) Interest Income Forex Losses/Gains (1) Net Other 21 (57) Pre-Tax Profit Income Tax (62) (76) (32) (35) (32) Others Minority Interests Net Profit Cash Flow YE Dec (US$ Mn) 214A 215A 216F 217F 218F Operating Profit Net Interest Depr & Amort Other expenses/income 21 (57) Other Gain / Loss Tax (62) (76) (32) (35) (32) Chg in Working Capital (38) 2 19 (1) (3) Other Oper. Cash Flow Oper. Cash Flow Capital Expenditure (23) (1) (75) (75) (5) FCF (OPCF after Capex) Other Investing CF (52) 3 (3) 1 1 CF From Investing (75) 21 (78) (74) (49) Net Chg in Debts Equity Funds Raised Dividend (2) (16) (5) (6) (65) Other Financing CF (7) 14 CF From Financing (27) (146) (5) (6) (65) Non-Recur. Inc (Exp) (1) Extraord. Inc(Exp) Net Change in Cash (61) Cash at beginning Cash at End Valuation YE Dec 214A 215A 216F 217F 218F PER (x) EV/EBITDA (x) P/BV (x) P/CF (x) Dividend Yield (%) Balance Sheet YE Dec (US$ Mn) 214A 215A 216F 217F 218F Cash & ST Investment Acct. Receivable Inventory Others Current Assets Investments Fixed Assets Others Total Assets 1,37 1,145 1,143 1,168 1,24 Curr. Liabilities Acct. Payable ST Borrowings Others Long-Term Liabilities Long-Term Payable Others Total Liabilities Shareholder s Equity Key Ratios YE Dec 214A 215A 216F 217F 218F Growth (% YoY) Sales (1.8) (18.2) (15.6) EBIT (24.4) (18.) (45.1) EBITDA (21.1) (16.6) (34.4) Net Profit (2.3) (68.5) Profitability (%) Gross Profit Margin Oper. Margin EBITDA Margin Net Margin ROAA ROAE Leverage Net Debt / Equity (%) (24.5) (28.7) (3.4) (3.) (33.4) EBITDA/Gross Int. (x) Per Share Data (USD Cents) EPS CFPS BVPS DPS Please see important disclosure at the back of this report Page 4 of 5

5 Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk Plaza Mandiri 28 th Floor, Jl. Jend. Gatot Subroto Kav , Jakarta 1219, Indonesia General: , Fax : (Equity Sales) RESEARCH John Rachmat Head of Equity Research, Strategy john.rachmat@mandirisek.co.id Tjandra Lienandjaja Banking tjandra.lienandjaja@mandirisek.co.id Liliana S Bambang Property, Building Material liliana.bambang@mandirisek.co.id Ariyanto Kurniawan Telecom, Coal, Metal, Automotive ariyanto.kurniawan@mandirisek.co.id Rizky Hidayat Property, Industrial, Media rizky.hidayat@mandirisek.co.id Bob Setiadi Construction, Toll Road bob.setiadi@mandirisek.co.id Francis Lim Health Care, Hospital francis.lim@mandirisek.co.id Yudha Gautama Mining, Plantation yudha.gautama@mandirisek.co.id Kevin Halim Property, Industrial, Media kevin.halim@mandirisek.co.id Leo Putera Rinaldy Economist leo.rinaldy@mandirisek.co.id Wisnu Trihatmojo Research Assistant wisnu.trihatmojo@mandirisek.co.id Priscilla Thany Research Assistant priscilla.thany@mandirisek.co.id Ferdy Wan Research Assistant ferdy.wan@mandirisek.co.id Giovanni Dustin Research Assistant giovanni.dustin@mandirisek.co.id INSTITUTIONAL SALES Lokman Lie Co-Head Institutional Equities lokman.lie@mandirisek.co.id Silva Halim Co-Head Institutional Equities silva.halim@mandirisek.co.id Aditya Sastrawinata Institutional Sales aditya.sastrawinata@mandirisek.co.id Andrew Handaya Institutional Sales andrew.handaya@mandirisek.co.id Cindy Amelia P. Kalangie Institutional Sales cindy.amelia@mandirisek.co.id Feliciana Ramonda Institutional Sales feliciana.ramonda@mandirisek.co.id Karmia Tandjung-Nasution Institutional Sales karmia.tandjung@mandirisek.co.id Mirna Santikara Salim Institutional Sales santikara.salim@mandirisek.co.id Oos Rosadi Institutional Sales oos.rosadi@mandirisek.co.id Vera Ongyono Institutional Sales vera.ongyono@mandirisek.co.id Zahra Aldila Niode Institutional Sales zahra.niode@mandirisek.co.id Kusnadi Widjaja Equity Dealing kusnadi.widjaja@mandirisek.co.id Edwin Pradana Setiadi Equity Dealing edwin.setiadi@mandirisek.co.id Jane Theodoven Sukardi Equity Dealing jane.sukardi@mandirisek.co.id Michael Taarea Equity Dealing michael.taarea@mandirisek.co.id RETAIL SALES Andreas M. Gunawidjaja Head Retail Equities andreas@mandirisek.co.id Boy Triyono Plaza Mandiri boy.triyono@mandirisek.co.id A. A. Damargumilang Pondok Indah Office Tower damar.gumilang@mandirisek.co.id Herianto Pondok Indah Prioritas herianto@mandirisek.co.id Yohanes Triyanto Kelapa Gading yohanes.triyanto@mandirisek.co.id Hendra Riady Mangga Dua hendra.riady@mandirisek.co.id Indra Mas'ari Bandung indra.mas ari@mandirisek.co.id Yogiswara P. Yogyakarta yogiswara.perdana@mandirisek.co.id Widodo Solo widodo@mandirisek.co.id Linawati Surabaya Linawati@mandirisek.co.id Bambang Suwanto Malang bambang.suwanto@mandirisek.co.id Ruwie Medan ruwie@mandirisek.co.id Aidil Idham Palembang aidil.idham@mandirisek.co.id Yuri Ariadi Pontianak yuri.ariadi@mandirisek.co.id INVESTMENT RATINGS: Indicators of expected total return (price appreciation plus dividend yield) within the 12-month period from the date of the last INVESTMENT RATINGS: Indicators of expected total return (price appreciation plus dividend yield) within the 12-month period from the date of the last published report, are: Buy (1% or higher), Neutral (-1% to1%) and Sell (-1% or lower). published report, are: Buy (1% or higher), Neutral (-1% to1%) and Sell (-1% or lower). DISCLAIMER: This report is issued by PT. Mandiri Sekuritas, a member of the Indonesia Stock Exchanges (IDX) and Mandiri Sekuritas is registered and DISCLAIMER: This report is issued by PT. Mandiri Sekuritas, member of the Indonesia Stock Exchanges (IDX) and Mandiri Sekuritas is registered and supervised by the Financial Services Authority (OJK). Although the contents of this document may represent the opinion of PT. Mandiri Sekuritas, deriving its supervised by the Financial Services Authority (OJK). Although the contents of this document may represent the opinion of PT. Mandiri Sekuritas, deriving its judgement from materials and sources believed to be reliable, PT. Mandiri Sekuritas or any other company in the Mandiri Group cannot guarantee its judgement from materials and sources believed to be reliable, PT. Mandiri Sekuritas or any other company in the Mandiri Group cannot guarantee its accuracy and completeness. PT. Mandiri Sekuritas or any other company in the Mandiri Group may be involved in transactions contrary to any opinion herein accuracy and completeness. PT. Mandiri Sekuritas or any other company in the Mandiri Group may be involved in transactions contrary to any opinion herein to make markets, or have positions in the securities recommended herein. PT. Mandiri Sekuritas or any other company in the Mandiri Group may seek or will to make markets, or have positions in the securities recommended herein. PT. Mandiri Sekuritas or any other company in the Mandiri Group may seek or will seek investment banking or other business relationships with the companies in this report. For further information please contact our number seek investment banking or other business relationships with the companies in this report. For further information please contact our number or fax or fax ANALYSTS CERTIFICATION: Each contributor to this report hereby certifies that all the views expressed accurately reflect his or her views about the ANALYSTS CERTIFICATION: Each contributor to this report hereby certifies that all the views expressed accurately reflect his or her views about the companies, securities and all pertinent variables. It is also certified that the views and recommendations contained in this report are not and will not be companies, securities and all pertinent variables. It is also certified that the views and recommendations contained in this report are not and will not be influenced by any part or all of his or her compensation. influenced by any part or all of his or her compensation.