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ADRO, at 0.47X assets
Current, target price 1,320, 3,715 (+181%)
September 2nd, 2021
1 minute read
Sales jump
Costs stable
1 minute read
Sales jump
- Sales jumped by another 26% in the second quarter to 871 million dollars which is well above our forecast 796 million dollars.
- This brings the average quarterly growth to 10%.
- We predict average growth of 3% in this next 12 months to bring sales to 978 million dollars in the second quarter 2022.
Costs stable
- The cash cost ratio of net profit add non cash costs minus sales as a percent of sales was at -75% in the second quarter & profit was up to 114 million dollars.
- Average quarterly costs are now at -75%.
- We use the same -75% costs to predict a 122 million dollars profit in the second quarter of 2022.
Cashflow strong
Balance sheet, higher leverage
Value, at 0.47X assets
- Cashflow leapt to 234 million dollars with investment spending of -39 million dollars in the second quarter.
- Average quarterly Cashflow has now improved to 145 million dollars.
- We use higher -54 million dollars investment spending which with higher sales gives a 189 million dollars cashflow in the second quarter of 2022.
Balance sheet, higher leverage
- Cash increased from 1,190 to 1,208 million dollars in the second quarter.
- Liabilities increased from 2,385 to 2,693 million dollars so net cash worsened from -1,195 to -1,485 million dollars.
- With our forecast cashflow & a -221 million dollars equity payout, net cash will be -999 million dollars in 12 months time.
Value, at 0.47X assets
- ADRO capital from the last six years declined to 1,626 million dollars in the second quarter from other investments.
- At the current market value of 3,016 million dollars, based on our forecasts, it’s at 0.81X sales & 0.47X assets with a 7% yield.
- Our free cashflow forecast is 707 million dollars. At 12X, this gives a 181% higher target price of 3,715 dollars.
