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ADRO, an 8.3% yield
Current, target price Rp
1,250, 4,946 (+296%)
May 5th, 2021
1 minute read
Sales, up above expectations
Cashflow, slightly lower
1 minute read
Sales, up above expectations
- Sales finally increased by 19% in the first quarter to 692 million dollars, which is +17% compared to our forecast.
- This is after a -2% decline in the fourth quarter & brings the quarterly average growth to -1%.
- We predict average growth of 6% a quarter in this next 12 months which will bring sales to 875 million dollars by the first quarter of 2022.
Cashflow, slightly lower
- Cashflow was at 74 million dollars in the first quarter after 99 million dollars in the fourth quarter.
- Average quarterly cashflow is now at 133 million dollars.
- We use flat investment spending of -54 million dollars, which with higher sales, gives a higher average quarterly cashflow of 181 million dollars in this next 12 months.
Sales finally up, above forecast, margins strong, cashflow strong, de leveraging, incredibly cheap, much higher target price...
Balance sheet, de leveraging
Profit, strong margins
Value, am 8.3% yield
- With positive cashflow, the net leverage of cash minus total liabilities was -1,195 million dollars in the first quarter from -1,256 million dollars in the fourth quarter & -1,695 million dollars a year ago.
- With our forecast higher cashflow & assuming a dividend payout of -238 million dollars...
- ...net cash will improve to -710 million dollars in 12 months time.
Profit, strong margins
- Net profit was also at 75 million dollars in the first quarter up from 38 million dollars in the fourth quarter.
- The cash cost ratio of net profit add back non cash costs minus sales as a percent of sales was at -73%.
- We use the same -73% costs, to predict a much higher next 12 months profit of 476 million dollars.
Value, am 8.3% yield
- ADRO cumulative net capital is at 1,716 million dollars from the last six years.
- At the current market value of 2,856 million dollars, based on forecasts it’s only 1.19X capital paid, 0.83X sales, 0.45X assets, 0.66X equity, with an 11.0% profitability & a 8.3% yield.
- Our free cashflow forecast is 723 million dollars. At 1.6% with a 0.25X adjustment, gives a 296% higher target price of 4,946 rupiah.
