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MBSS, terrible sales but making money...
🎯 🚣♀️ 📈 Rp760
Last 12 months cashflow +Rp7bn ⬇️
September 29th, 2020
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Sales
Sales in the 2Q slumped -34%, the 3rd quarter in a row of large double digit negative growth & 35% below our forecast. Tug & barge sales declined -50% & floating cranes -88%! This was offset by other income. Sales are at the lowest in 5 years. We predict a recovery from the 2Q USD12.6m to USD17.9m by 2Q 2021..
Cashflow
Cashflow was back to a positive +USD2m in the 2Q excluding working capital after a negative -USD1m in the 1Q. Investment spending has picked up a bit in the first half, but we see a slightly moderation again in this next 12/ months. This combined with our forecast sales recovery gives a small average quarterly free cashflow forecast of +USD1m.
Sales in the 2Q slumped -34%, the 3rd quarter in a row of large double digit negative growth & 35% below our forecast. Tug & barge sales declined -50% & floating cranes -88%! This was offset by other income. Sales are at the lowest in 5 years. We predict a recovery from the 2Q USD12.6m to USD17.9m by 2Q 2021..
Cashflow
Cashflow was back to a positive +USD2m in the 2Q excluding working capital after a negative -USD1m in the 1Q. Investment spending has picked up a bit in the first half, but we see a slightly moderation again in this next 12/ months. This combined with our forecast sales recovery gives a small average quarterly free cashflow forecast of +USD1m.
Sales to turn up, cashflow is positive, growing net cash, higher share price...
Balance sheet
The bright spot is that the balance sheet is in net cash now & rising. Despite the sales slowdown, the net cash position which started in the 4Q has increased to USD6m by the 2Q. With our forecast for a small positive cashflow ahead & assuming no dividend payment then the net cash will rise to USD11.1m in 12 months.
Profit
There’s only been 5 quarters of net profit in the last 5 years. 2Q 2020 was a slightly higher loss of -USD2.3m. The cash cost ratio of net profit add depreciation minus sales as a % of sales was 73%. We use the last 12 months average cost ratio, 76% to predict a next 12 months net loss of -USD4.9m.
Value
Despite the weak sales, MBSS has been paying out some capital, Rp70bn in 5 years. At USD46m current market value, its 0.76x sales, 0.22x assets, 0.28x equity with no profitability & no yield yet. We cut our cashflow forecast to USD5.1m. At 1.6% with a large 0.3x adjustment because of the weak sales, gives a higher target price of Rp760.
The bright spot is that the balance sheet is in net cash now & rising. Despite the sales slowdown, the net cash position which started in the 4Q has increased to USD6m by the 2Q. With our forecast for a small positive cashflow ahead & assuming no dividend payment then the net cash will rise to USD11.1m in 12 months.
Profit
There’s only been 5 quarters of net profit in the last 5 years. 2Q 2020 was a slightly higher loss of -USD2.3m. The cash cost ratio of net profit add depreciation minus sales as a % of sales was 73%. We use the last 12 months average cost ratio, 76% to predict a next 12 months net loss of -USD4.9m.
Value
Despite the weak sales, MBSS has been paying out some capital, Rp70bn in 5 years. At USD46m current market value, its 0.76x sales, 0.22x assets, 0.28x equity with no profitability & no yield yet. We cut our cashflow forecast to USD5.1m. At 1.6% with a large 0.3x adjustment because of the weak sales, gives a higher target price of Rp760.
