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CLEO, cashflow turns positive
🎯 💧 📈 Rp563
Last 12-months cashflow +Rp 59 billion ⬆️⬆️
December 8th, 2020
1 minute read
Sales
After the familiar two quarters of declines,sales were up +2% in the third quarter. At Rp 226 billion, sales were 12% below our forecast Rp 256 billion. The smaller bottled water sales had a bigger jump, up +20% from the second quarter. This bodes well for higher sales & we forecast Rp 278 billion by the third quarter next year.
Cashflow
Despite our miss on sales, operating cashflow was almost exactly as we had forecast. But investment spending was lower than expected so free cashflow almost doubled to Rp 23 billion in the third quarter. We reduce our investment spending forecast & with higher sales, we get a higher average quarterly free cashflow Rp 27 billion in this next 12 months.
1 minute read
Sales
After the familiar two quarters of declines,sales were up +2% in the third quarter. At Rp 226 billion, sales were 12% below our forecast Rp 256 billion. The smaller bottled water sales had a bigger jump, up +20% from the second quarter. This bodes well for higher sales & we forecast Rp 278 billion by the third quarter next year.
Cashflow
Despite our miss on sales, operating cashflow was almost exactly as we had forecast. But investment spending was lower than expected so free cashflow almost doubled to Rp 23 billion in the third quarter. We reduce our investment spending forecast & with higher sales, we get a higher average quarterly free cashflow Rp 27 billion in this next 12 months.
Sales up, 12 month cashflow turns positive, debt down, high valuation, but a slightly higher target price...
Balance sheet
The slowdown in investment spending & resulting stronger cashflow has helped the balance sheet net debt to reduce to Rp 279 billion in the third quarter from Rp 325 billion in the second quarter. Our higher free cashflow forecast & a Rp 43 billion dividend payout would mean a lower net debt of Rp 214 billion in 12 months time.
Profit
Net profit was slightly higher at Rp 30 billion in the third quarter as depreciation is rising. The cash cost ratio of net profit add depreciation minus sales as a percent of sales was steady at 78%. We use the same 78% to predict the next 12 months profit is +10% higher at Rp 145 billion.
Value
CLEO net capital raised has started to reduce & was Rp 463 billion in the third quarter. At the current value, Rp 5.7 trillion, it’s 5.59X sales, 4.17X assets, 5.95X equity, with a 15% profitability & a 0.8% yield. Our free cashflow forecast is Rp 108 billion. At 1.6% with generous no adjustment, gives a higher target price of Rp563.
The slowdown in investment spending & resulting stronger cashflow has helped the balance sheet net debt to reduce to Rp 279 billion in the third quarter from Rp 325 billion in the second quarter. Our higher free cashflow forecast & a Rp 43 billion dividend payout would mean a lower net debt of Rp 214 billion in 12 months time.
Profit
Net profit was slightly higher at Rp 30 billion in the third quarter as depreciation is rising. The cash cost ratio of net profit add depreciation minus sales as a percent of sales was steady at 78%. We use the same 78% to predict the next 12 months profit is +10% higher at Rp 145 billion.
Value
CLEO net capital raised has started to reduce & was Rp 463 billion in the third quarter. At the current value, Rp 5.7 trillion, it’s 5.59X sales, 4.17X assets, 5.95X equity, with a 15% profitability & a 0.8% yield. Our free cashflow forecast is Rp 108 billion. At 1.6% with generous no adjustment, gives a higher target price of Rp563.
