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CSRA, already making money
🎯 🌴 📈 Rp504
Last 12 months cashflow +Rp45bn ⬆️
September 25th, 2020
⏰ 1 minute read
⏰ 1 minute read
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Sales
Sales growth in the 2Q was flat, 0% from a year ago after +34% growth in the 1Q, for this newly listed 18,000 hectare plantation company. We don’t have data on production, but fruit sales were up +65%, kernel was down -11%, oil down -9%. We assume sales will revive from the 3Q, +4.7% this next 12 months to Rp554bn,
Cashflow
Cashflow is now positive!. Free cashflow was +Rp10bn excluding working capital in the 2Q. This is a turnaround from last year when cashflow was still negative. Since then the investment spending seems to have slowed allowing cashflow to turn positive. Assuming the same level of investment spend with higher sales, cashflow will average Rp8bn a quarter this next 12 months.
Sales growth in the 2Q was flat, 0% from a year ago after +34% growth in the 1Q, for this newly listed 18,000 hectare plantation company. We don’t have data on production, but fruit sales were up +65%, kernel was down -11%, oil down -9%. We assume sales will revive from the 3Q, +4.7% this next 12 months to Rp554bn,
Cashflow
Cashflow is now positive!. Free cashflow was +Rp10bn excluding working capital in the 2Q. This is a turnaround from last year when cashflow was still negative. Since then the investment spending seems to have slowed allowing cashflow to turn positive. Assuming the same level of investment spend with higher sales, cashflow will average Rp8bn a quarter this next 12 months.
Appears to be making money... not as cheap as others, but shares to rise back to Rp500...
Balance sheet
As a young plantation, the balance sheet has been in net debt. Back in the 2Q of last year, the net debt was at Rp711bn. After the IPO, the net debt declined & is Rp634bn in this 2Q. With our forecast positive cashflow in this next 12 months & with no dividend payout, the net debt will decline to Rp601bn.
Profit
Net profit was a positive Rp11bn in the 2Q. The cash cost ratio of net profit add back depreciation & other non cash (Biological gains) minus sales as a % of sales is at 86%. This matches with costs in the cashflow statement. We use this 86% to predict the next 12 months profit will be a small positive Rp3bn.
Value
CSRA has been raising capital but is now turning a payer & will pay Rp33bn this year. At Rp627bn market value, it’s 1.13x sales, 0.46x assets, 1.12x equity with a profitability of 0.5%, yield is 0%. Our 12 month cashflow forecast is +Rp33bn. At 1.6% with a 0.5x adjustment because of the debt, gives a higher target price of Rp504.
As a young plantation, the balance sheet has been in net debt. Back in the 2Q of last year, the net debt was at Rp711bn. After the IPO, the net debt declined & is Rp634bn in this 2Q. With our forecast positive cashflow in this next 12 months & with no dividend payout, the net debt will decline to Rp601bn.
Profit
Net profit was a positive Rp11bn in the 2Q. The cash cost ratio of net profit add back depreciation & other non cash (Biological gains) minus sales as a % of sales is at 86%. This matches with costs in the cashflow statement. We use this 86% to predict the next 12 months profit will be a small positive Rp3bn.
Value
CSRA has been raising capital but is now turning a payer & will pay Rp33bn this year. At Rp627bn market value, it’s 1.13x sales, 0.46x assets, 1.12x equity with a profitability of 0.5%, yield is 0%. Our 12 month cashflow forecast is +Rp33bn. At 1.6% with a 0.5x adjustment because of the debt, gives a higher target price of Rp504.
