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SIMP
Salim Ivomas, strong sales growth
🎯🌴📈➡️ Rp810
12m free cashflow +Rp196bn ⬆️
August 15th, 2020
⏰ 1 minute read
⏰ 1 minute read
Watch our 3 minute explainer using the data file & model
Sales
Sales growth was positive at +13% compared to a year ago in the 2Q which is 7% above our forecast & the first quarter out of five with positive sales growth. Fruit production was down -1%, Plantation sales up +12% & downstream +13%. We expect sales to continue to rise & +7.9% growth in the next 12 months to Rp15.1tn.
Cashflow
Cashflow in the Q was also positive Rp183bn excluding working capital, that helped the last 12 months average quarterly cashflow to rise to +Rp49bn. Cashflow has been recovering significantly as investment spending has slowed down. With our forecast for sales growth in the next 12 months, we also get a higher next 12 months average quarterly free cashflow of Rp126bn.
Sales growth was positive at +13% compared to a year ago in the 2Q which is 7% above our forecast & the first quarter out of five with positive sales growth. Fruit production was down -1%, Plantation sales up +12% & downstream +13%. We expect sales to continue to rise & +7.9% growth in the next 12 months to Rp15.1tn.
Cashflow
Cashflow in the Q was also positive Rp183bn excluding working capital, that helped the last 12 months average quarterly cashflow to rise to +Rp49bn. Cashflow has been recovering significantly as investment spending has slowed down. With our forecast for sales growth in the next 12 months, we also get a higher next 12 months average quarterly free cashflow of Rp126bn.
Strong sales, positive cashflow, lower deby, very cheap, higher target price...
Balance sheet
The balance sheet is in net debt because of the previous negative cashflow. But as cashflow has improved, net debt has also reduced in the last 12 months & was at Rp8tn as of the 2Q. With our forecast for positive cashflow ahead & assuming no dividend payout, the next 12 months net debt will be lower again to Rp7.5tn.
Profit
With sales growth, loss was less compared to a year ago. The cash cost ratio of net profit add depreciation & other non cash costs minus sales as a % of sales was at 99% bringing the last 12 months ratio to 95%. We use a lower 92% as prices rise, to predict a lower next 12 month loss, -Rp133bn.
Value
SIMP current market value is Rp4,991bn. That’s 0.33X our sales forecast, 0.15X the value of the total assets & 0.29X the equity with no profitability. That’s very cheap. Yield is forecast at 0%. We use our 1.6% cashflow valuation with a 60% discount because of the large debt which gives a much higher target price of Rp810.
The balance sheet is in net debt because of the previous negative cashflow. But as cashflow has improved, net debt has also reduced in the last 12 months & was at Rp8tn as of the 2Q. With our forecast for positive cashflow ahead & assuming no dividend payout, the next 12 months net debt will be lower again to Rp7.5tn.
Profit
With sales growth, loss was less compared to a year ago. The cash cost ratio of net profit add depreciation & other non cash costs minus sales as a % of sales was at 99% bringing the last 12 months ratio to 95%. We use a lower 92% as prices rise, to predict a lower next 12 month loss, -Rp133bn.
Value
SIMP current market value is Rp4,991bn. That’s 0.33X our sales forecast, 0.15X the value of the total assets & 0.29X the equity with no profitability. That’s very cheap. Yield is forecast at 0%. We use our 1.6% cashflow valuation with a 60% discount because of the large debt which gives a much higher target price of Rp810.
