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FREN, cashflow has turned positive
Current, target price 125, 142 (+13%)
August 20th, 2021
1 minute read
Sales up
Costs down
1 minute read
Sales up
- Sales grew by 6% in the second quarter to 2,545 billion rupiah which is below our forecast 2,767 billion rupiah.
- This brings the average quarterly growth to 3%.
- We predict average growth of 8% in this next 12 months to bring sales to 3,457 billion rupiah in the second quarter 2022.
Costs down
- The cash cost ratio of net profit add non cash costs minus sales as a percent of sales was down to -67% in the second quarter & profit improved to -55 billion rupiah.
- Average quarterly costs are now at -73%.
- We use the latest -67% costs to predict a 182 billion rupiah profit in the second quarter of 2022.
Cashflow has turned positive
But higher leverage
Only 13% higher target price ,
- Cashflow was up to 241 billion rupiah with lower investment spending of -466 billion rupiah in the second quarter.
- Average quarterly Cashflow has now improved to -449 billion rupiah.
- We use the same -466 billion rupiah investment spending which with higher sales gives a positive 398 billion rupiah cashflow in the second quarter 2022.
But higher leverage
- Cash increased from 520 to 980 billion rupiah in the second quarter.
- Liabilities also increased from 26,777 to 29,159 billion rupiah so net cash worsened from -26,257 to -28,179 billion rupiah.
- With our forecast cashflow & a -76 billion rupiah equity payout, net cash will be -25,907 billion rupiah in 12 months time.
Only 13% higher target price ,
- FREN capital from the last six years worsened to -24,772 billion rupiah in the second quarter.
- At the current market value of 32,910 billion rupiah, based on our forecasts, it’s at 2.58X sales & 0.83X assets with a 0% yield.
- Our free cashflow forecast is 1,244 billion rupiah. At 30 (a 3% yield), this gives a 13% higher target price of 142 rupiah.
