Company Update / Coal / IJ / Click here for full PDF version
Author(s): Reggie Parengkuan ;Ryan Winipta
- 1Q24 NP of US$374mn was a strong beat vs. cons/ours at 37/31% on lower than expected cash cost, thanks to lower SR.
- Regardless, 1Q24 NP still declined 11% qoq as lower blended ASP (-3% qoq) and sales volume (-1% qoq) more than offsets lower cash cost.
- Upgrade FY24 earnings estimate by 10% and maintain Buy at upgraded SOTP -based TP of Rp3,000.
1Q24 earnings drop as lower ASP offset the lower cash cost
reported 1Q24 NP of US$374mn (-11% qoq/-18% yoy), a strong beat against consensus and our estimates at 37/31% of FY24 forecast respectively. This was primarily attributed to lower-than-expected thermal cash cost (-4% qoq; IPS US$48/t), as well as coking (+24% qoq; IPS US$123/t). However, 1Q24 earnings still declined on lower blended ASP (-3% qoq/-24% yoy). Nonetheless, revenue of US$1.4bn (-6% qoq/-22% yoy) was broadly in-line with ours/consensus (at 26/27%), while EBITDA of US$601mn (-4% qoq/-20% yoy) was above at 31/32%.
1Q24 thermal volume: in-line sales volume, SR came below
Thermal production volume rose to 16.5Mt in 1Q24 (+19% qoq/+15% yoy), which came above our estimate (at 28%) and management guidance (at 27%). However, thermal sales volume of 16.5Mt (-1% qoq/+5% yoy) lagged behind production and thus came in-line with our estimate at 25%. Thermal SR declined to 3.7x (-19% qoq), likely due to higher rainfall. With SR being below management's guidance of 4.3x, we expect to catch up on SR in the upcoming quarters. Please see ournote on for more details on the coking coal business.
Blended ASP declined on higher thermal sales volume
Thermal ASP slightly improved by 1% qoq to US$74/t, in-line with 1-month lag ICI3 price (+2% qoq). The decline in blended ASP of 3% qoq was due to higher thermal sales volume proportion of 94% (4Q23: 91%) as thermal bears lower ASP; coking coal ASP rose by 4% qoq. Meanwhile, thermal cash cost declined 3% qoq to US$51/t mainly on lower stripping ratio. Overall, blended ASP came in-line with our estimate (at 102% IPS), while blended cash cost was below (at 93% IPS).
Maintain Buy with higher SOTP -based TP of Rp3,000
We upgrade our FY24 earnings estimate by 10% on higher ASP (+2%) and lower cash cost (-2%). We maintain our Buy rating at upgraded SOTP -based TP of Rp3,000 from Rp2,750 previously. Key upside risk to our estimate is escalating geopolitical tension. Downside risk is increasing domestic production in China and India.
Sumber : IPS
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