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TINS, debt reducing fast
🎯 ⛏ 📈 Rp1,316
Last 12-month cashflow +Rp 3,199BN ⬆️
November 5th, 2020
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Sales
Sales growth improved to a negative 21% in the third quarter from -34% in the second quarter. Sales were up eight percent from the second quarter & two percent below our forecast. Sales of tin metal, silver & chemicals were up by nine percent. We expect sales to grow by twenty percent in this next 12 months to Rp 19.7TN.
Cashflow
Cashflow was back to negative again in the third quarter, minus Rp 176BN, excluding (more) positive working capital. But the last two quarters cashflow combined has recovered to back to positive again. Using the recent average investment spending combined with our forecast for higher sales gives a positive average quarterly free cashflow of Rp 112BN in this next 12 months.
Sales growth improved to a negative 21% in the third quarter from -34% in the second quarter. Sales were up eight percent from the second quarter & two percent below our forecast. Sales of tin metal, silver & chemicals were up by nine percent. We expect sales to grow by twenty percent in this next 12 months to Rp 19.7TN.
Cashflow
Cashflow was back to negative again in the third quarter, minus Rp 176BN, excluding (more) positive working capital. But the last two quarters cashflow combined has recovered to back to positive again. Using the recent average investment spending combined with our forecast for higher sales gives a positive average quarterly free cashflow of Rp 112BN in this next 12 months.
Sales recover, still positive working capital, reduces debt, higher target ...
Balance sheet
The huge net debt which reached almost ten trillion rupiah last year has reversed quickly thanks to the large positive working capital as inventory was been reduced. Net debt was down to Rp 6.4TN in the 3Q. With our positive cashflow forecast & a dividend of Rp 64BN, net debt will be lower at Rp 6.1TN in 12 months time.
Profit
With higher sales, net profit was also higher in the third quarter. After four quarters of losses there have now been two consecutive quarters of profits. The cash cost ratio of profit add depreciation minus sales as a % of sales has improved to 92%. We use 93% to predict a next 12 month return to profit of Rp 638BN.
Value
TINS hs been raising capital although this has reduced from nine trillion rupiah to now Rp 4.6TN. At Rp 6.4TN current value, it’s 0.32X sales, 0.38X assets, 1.16X equity with an 11.6% profitability & a 1% yield. Our cashflow forecast is Rp 448BN. At 1.6% with a 0.35X adjustment because of the large debt, gives a higher target price Rp1,316.
The huge net debt which reached almost ten trillion rupiah last year has reversed quickly thanks to the large positive working capital as inventory was been reduced. Net debt was down to Rp 6.4TN in the 3Q. With our positive cashflow forecast & a dividend of Rp 64BN, net debt will be lower at Rp 6.1TN in 12 months time.
Profit
With higher sales, net profit was also higher in the third quarter. After four quarters of losses there have now been two consecutive quarters of profits. The cash cost ratio of profit add depreciation minus sales as a % of sales has improved to 92%. We use 93% to predict a next 12 month return to profit of Rp 638BN.
Value
TINS hs been raising capital although this has reduced from nine trillion rupiah to now Rp 4.6TN. At Rp 6.4TN current value, it’s 0.32X sales, 0.38X assets, 1.16X equity with an 11.6% profitability & a 1% yield. Our cashflow forecast is Rp 448BN. At 1.6% with a 0.35X adjustment because of the large debt, gives a higher target price Rp1,316.
