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ANTM
Aneka Tambang, debt reducing fast
🎯⚒📈➡️ Rp1,171
12 month free cash flow +Rp800bn ⬇️
August 11th, 2020
⏰ 1 minute read
⏰ 1 minute read
Watch the 3 minute explainer using the data file & model ⬇️
Sales
Sales growth was down at -51% compared to a year ago in the 2Q which is -20% below our forecast; the second quarter in a row of negative sales growth. Gold sales were down -57%, nickel -44% & others +12%%. We expect a recovery from the 3Q onwards which results in negative -8.5% growth the next 12 months to Rp25.2tn.
Cashflow
Cashflow in the 2Q was negative at -Rp134bn excluding working capital. While the last 12 months average quarterly cashflow is at +Rp200bn. Cashflow has been recovering as investment spending has slowed down. Despite our forecast for negative sales growth in the next 12 months, lower investment gives us a higher next 12 months average free cashflow of Rp250bn per quarter.
Sales growth was down at -51% compared to a year ago in the 2Q which is -20% below our forecast; the second quarter in a row of negative sales growth. Gold sales were down -57%, nickel -44% & others +12%%. We expect a recovery from the 3Q onwards which results in negative -8.5% growth the next 12 months to Rp25.2tn.
Cashflow
Cashflow in the 2Q was negative at -Rp134bn excluding working capital. While the last 12 months average quarterly cashflow is at +Rp200bn. Cashflow has been recovering as investment spending has slowed down. Despite our forecast for negative sales growth in the next 12 months, lower investment gives us a higher next 12 months average free cashflow of Rp250bn per quarter.
3Q sales recovery, maintaining positive cashflow, lower debt, higher share price...
Balance sheet
The balance sheet is in net debt because of the previous negative cashflow. But with the now positive cashflow, net debt has been falling for 5 quarters in a row & was Rp5.24tn as of the 2Q. With our forecast for positive cashflow ahead & no dividend payout, the next 12 months net debt will continue to improve to Rp4.24tn.
Profit
While the sales dropped sharply, profit was up by +89% thanks to large FX gains. The cash cost ratio of net profit add depreciation minus sales as a % of sales was much higher at 107% bringing the last 12 months ratio to 96%. We use the 1Q 94% to predict a return to positive next 12 months profit, Rp456bm.
Value
ANTM current market value is at Rp19.83tn. That’s 0.79X our sales forecast, 0.68X the value of the total assets & 1.07X the equity with a profitability of 2.5%. That’s quite cheap. Yield is forecast at 0%. We use our 1.6% cashflow valuation with a 55% discount because of yeh improving debt which gives a much higher target price of Rp.1,172.
The balance sheet is in net debt because of the previous negative cashflow. But with the now positive cashflow, net debt has been falling for 5 quarters in a row & was Rp5.24tn as of the 2Q. With our forecast for positive cashflow ahead & no dividend payout, the next 12 months net debt will continue to improve to Rp4.24tn.
Profit
While the sales dropped sharply, profit was up by +89% thanks to large FX gains. The cash cost ratio of net profit add depreciation minus sales as a % of sales was much higher at 107% bringing the last 12 months ratio to 96%. We use the 1Q 94% to predict a return to positive next 12 months profit, Rp456bm.
Value
ANTM current market value is at Rp19.83tn. That’s 0.79X our sales forecast, 0.68X the value of the total assets & 1.07X the equity with a profitability of 2.5%. That’s quite cheap. Yield is forecast at 0%. We use our 1.6% cashflow valuation with a 55% discount because of yeh improving debt which gives a much higher target price of Rp.1,172.
