## CLEO, cashflow turns positive

Current, target price IDR469, 620 (+32%)

Last, next 12-months cashflow +IDR 51, +198 billion

April 1st, 2021

1 minute read

Sales, up 12%

Cashflow, 12 months positive

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Sales, up 12%

- Sales jumped 12% in the fourth quarter to IDR 253 billion, which is 2% below our forecast.
- This is after 2% growth in the third quarter & brings the average quarterly growth to -4%.
- We forecast positive growth of 4% a quarter in the next 12 months which will bring sales up to IDR 307 billion by the fourth quarter 2021.

Cashflow, 12 months positive

- Cashflow also increased to IDR 59 billion in the fourth quarter up from IDR 46 billion in the third quarter.
- The average quarterly Cashflow is now at IDR 13 billion.
- Assuming the current investment spending of IDR 17 billion together with higher sales gives a much higher average quarterly free cashflow of IDR 50 billion in this next 12 months.

## Sales up, strong margins, 12 month cashflow turns positive, debt down, paying back capital, higher target price...

Balance sheet de leveraging

Profit, strong margins

Value, paying back capital

- With positive cashflow, the net leverage, cash minus total liabilities, was at -IDR 393 billion in the fourth quarter from -IDR 451 billion in the third quarter & -IDR 472 billion a year ago.
- With our forecast higher free cashflow and assuming an IDR 54 billion dividend payment...
- ... the net cash will be -IDR 249 billion in 12 months time.

Profit, strong margins

- Net profit was higher at IDR 39 billion in the fourth quarter up from IDR 30 billion in the third quarter.
- The cash cost ratio of net profit and back depreciation minus sales as a percent of sales was lower at 76%.
- We use the same 76% to predict a higher next 12 months net profit of IDR 182 billion

Value, paying back capital

- CLEO has raised capital of IDR 412 billion in the last five years.
- At the current market value of IDR 5.6 trillion, it’s at 5X sales 4.13X assets 5.5X equity with a 17.8% profitability and a 1% yield.
- Our free cashflow forecast is IDR 198 billion. At 1.6% with a 0.6X adjustment gives a higher target price of IDR620.