## NRCA, cashflow positive

Current, target price Rp326, 527 (+62%)

**Sales still declining,****but margins recovering,****cashflow positive on 0 investment,****de leveraging,****very cheap & a capital payer…**

June 4th, 2021

1 minute read

Sales down again

But cashflow positive

1 minute read

Sales down again

- Sales declined by -17% in the first quarter to 342 billion rupiah, which is -48% compared to our forecast.
- This is after a -24% decline in the fourth quarter & brings the quarterly average growth to -14%.
- We predict average growth of 10% a quarter in this next 12 months which will bring sales to 461 billion rupiah by the first quarter of 2022.

But cashflow positive

- Cashflow was positive 17 billion rupiah in the first quarter after positive 10 billion rupiah in the fourth quarter.
- Average quarterly cashflow is still negative -25 billion rupiah.
- We use flat investment spending of -0 billion rupiah, which with higher sales, gives a positive average quarterly cashflow of 13 billion rupiah in this next 12 months.

Balance sheet, lower leverage

Profit, margins are back

Value, very cheap & a capital payer

- With positive cashflow, the net leverage of cash minus total liabilities was -458 billion rupiah in the first quarter from -491 billion rupiah in the fourth quarter & -481 billion rupiah a year ago.
- With our forecast positive cashflow & assuming a dividend payout of -5 billion rupiah...
- ...net cash will be -412 billion rupiah in 12 months time.

Profit, margins are back

- Net profit was positive at 9 billion rupiah in the first quarter from -82 billion rupiah in the fourth quarter as….
- … the cash cost ratio of net profit add back non cash costs minus sales as a percent of sales was down to -97%
- We use the same -97% costs, to predict a higher next 12 months profit of 39 billion rupiah.

Value, very cheap & a capital payer

- NRCA cumulative net capital is positive 173 billion rupiah from the last five years.
- At the current market value of 788 billion rupiah, based on forecasts it’s 3.53X capital paid, 0.42X sales, 0.36X assets, 0.66X equity, with a 3.3% profitability & a 0.7% yield.
- Our free cashflow forecast is 51 billion rupiah. At 1.6% with a 0.4X adjustment, gives a 62% higher target price of 527 rupiah.