## PTRO, a 5.9% yield

Current, target price Rp2,270, 5,072 (+123%)

May 9th, 2021

1 minute read

Sales, flat

Cashflow, a surprise fall

1 minute read

Sales, flat

- Sales were flat in the first quarter at 91 million dollars, which is +1% compared to our forecast.
- This is after a 23% increase in the fourth quarter & brings the quarterly average growth to -1%.
- We predict average growth of 6% a quarter in this next 12 months which will bring sales back to 113 million dollars by the first quarter of 2022.

Cashflow, a surprise fall

- Cashflow was surprisingly way down at -28 million dollars in the first quarter after positive 26 million dollars in the fourth quarter.
- Average quarterly cashflow is still just positive 3 million dollars.
- We use flat investment spending of -8 million dollars, which with higher sales, gives a higher average quarterly cashflow of 14 million dollars in this next 12 months.

## Sales flat, margins down, cashflow big minus, leverage up... but the trend is still higher sales, strong margins, cashflow & de leverage, cheap with a 5.9% yield, higher target price...

Balance sheet, higher leverage

Profit, lower margins

Value

- With negative cashflow, the net leverage of cash minus total liabilities was -198 million dollars in the first quarter from -164 million dollars in the fourth quarter, but down from -247 million dollars a year ago.
- With our forecast higher cashflow & assuming a dividend payout of -9 million dollars...
- ...net cash will be -134 million dollars in 12 months time.

Profit, lower margins

- Net profit was also lower at 4 million dollars in the first quarter from 19 million dollars in the fourth quarter.
- The cash cost ratio of net profit add back non cash costs minus sales as a percent of sales was up sharply to -76%.
- We use the same -76% costs, to predict a flat next 12 months profit of 31 million dollars.

Value

- PTRO cumulative net capital is at +40 million dollars from the last five years.
- At the current market value of 161 million dollars, based on forecasts it’s only 1.6X capital paid, 0.4X sales, 0.3X assets, 0.6X equity, with a 12.2% profitability & a 5.9% yield.
- Our free cashflow forecast is 57.5 million dollars. At 1.6% with a very big 0.1X adjustment, gives a 123% higher target price of rupiah.