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ROTI, rising to capital payer
🎯 🍞 📈 Rp1,568
Last 12-month cashflow -Rp 40 billion ⬆️
January 20th, 2021
1 minute read
Sales
Positive sales growth returned in the third quarter with a +1% increase to Rp 766 billion, after a -17% decline in the second quarter. The average quarterly sales growth is now -3%. We see average sales growth turning positive, +4% in this next 12 months & sales rising back up to Rp 892 billion by the third quarter of 2021.
Cashflow
Cashflow was also back to a positive +Rp 61 billion in the third quarter after -Rp 274 billion in the second. Average cashflow is -Rp 10 billion. Investment spending was still quite high at Rp 134 billion. We use lower investment spending which with higher sales gives an average quarterly cashflow of Rp 44 billion in this next 12 months.
1 minute read
Sales
Positive sales growth returned in the third quarter with a +1% increase to Rp 766 billion, after a -17% decline in the second quarter. The average quarterly sales growth is now -3%. We see average sales growth turning positive, +4% in this next 12 months & sales rising back up to Rp 892 billion by the third quarter of 2021.
Cashflow
Cashflow was also back to a positive +Rp 61 billion in the third quarter after -Rp 274 billion in the second. Average cashflow is -Rp 10 billion. Investment spending was still quite high at Rp 134 billion. We use lower investment spending which with higher sales gives an average quarterly cashflow of Rp 44 billion in this next 12 months.
Sales growth to turn positive, cashflow to bring back to net capital payer, higher yield & target price...
Balance sheet
With positive cashflow, net cash minus liabilities improved to -Rp 635 billion in the third quarter from -Rp 910 billion in the second quarter. But that’s still bigger than -Rp 421 billion a year ago. With our forecast positive cashflow & a dividend payment of Rp 136 billion, net cash will improve to -Rp 392 billion in 12 months time.
Profit
Net profit was also back to a positive +Rp 27 billion in the third quarter after -Rp 2 billion in the second quarter. The cash cost ratio of net profit add back depreciation minus sales as a percent of sales was 90%. We use the average 87% to predict a higher Rp 271 billion profit in this next 12 months.
Value
ROTI is going to return to a net capital payer in this next 12 months. At the current market value of Rp 7.7 trillion, it’s 2.2X sales, 1.9X assets, 2.7X equity with a 5.9% profitability & a 1.8% yield. Our cashflow forecast is Rp 177 billion. At 1.6% with a generous 0.8X adjustment, gives a higher target price of Rp1,568.
With positive cashflow, net cash minus liabilities improved to -Rp 635 billion in the third quarter from -Rp 910 billion in the second quarter. But that’s still bigger than -Rp 421 billion a year ago. With our forecast positive cashflow & a dividend payment of Rp 136 billion, net cash will improve to -Rp 392 billion in 12 months time.
Profit
Net profit was also back to a positive +Rp 27 billion in the third quarter after -Rp 2 billion in the second quarter. The cash cost ratio of net profit add back depreciation minus sales as a percent of sales was 90%. We use the average 87% to predict a higher Rp 271 billion profit in this next 12 months.
Value
ROTI is going to return to a net capital payer in this next 12 months. At the current market value of Rp 7.7 trillion, it’s 2.2X sales, 1.9X assets, 2.7X equity with a 5.9% profitability & a 1.8% yield. Our cashflow forecast is Rp 177 billion. At 1.6% with a generous 0.8X adjustment, gives a higher target price of Rp1,568.
