ELSA, payouts to rise again
Target price Rp909
Last 12-month cashflow +Rp 193 billion
March 2nd,, 2021
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- Sales jumped by 6% in the fourth quarter to Rp 1.97 trillion after +1% growth in the third quarter, -10% in the second quarter.
- The average quarterly sales growth is now at -5%.
- We expect average quarterly growth to turn positive 7% in this next 12 months & sales to reach Rp 2.57 trillion by the fourth quarter of 2021.
- Cashflow was Rp 45 billion in the fourth quarter matching Rp 45 billion in the third quarter.
- The average quarterly Cashflow is at Rp 48 billion.
- Investment spending was higher at Rp 192 billion. We use the average Rp 142 billion in our forecast which with higher sales, gives an average quarterly Cashflow Rp 137 billion this next 12 months .
Sales rising, better margins, cashflow positive, leverage to reduce, payouts to rise, shares to Rp909....
- The net leverage of cash minus total liabilities was -Rp 2.59 trillion in the fourth quarter up from -Rp 2.61 trillion in the third quarter, Rp 2.37 trillion a year ago.
- With our forecast positive cashflow & assuming there is a dividend payout of Rp 39 billion...
- ...the net cash will improve to -Rp 2.08 trillion in 12 months time.
- Net profit was at Rp 62 billion in the fourth quarter down from Rp 57 billion in the third quarter.
- The cash costs ratio of net profit add back depreciation minus sales as a percent of sales was slightly higher, 88%.
- We use the same 86% cash cost ratio to predict a higher next 12 months profit of Rp 391 billion.
- ELSA has paid out capital Rp 171 billion the last six years.
- At the current market value Rp 2.86 trillion, it’s 16X capital paid, 0.32X sales, 0.39X assets, 0.7X equity with a 10% profitability & a 1.4% yield.
- Our free cashflow forecast is Rp 354 billion. At 1.6% with a 0.3X adjustment, this gives a higher target price of Rp909.