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HOLD Aneka Tambang
Quarterly results Results met expectations
Analyst What’s New
Lucky Ariesandi, CFA
lariesandi@kimeng.co.id Antam reported Rp756b in net profit for 1H10, a y/y increase of 238%,
(62 21) 2557 1127 thanks to the strong nickel price and higher ferronickel (FeNi) sales
volume. The results were in line with our estimates.
Performance improved in 2Q10, with production of FeNi and nickel ore
Price (Rp) Rp2,100 rising by 10% and 17% q/q, respectively. FeNi sales jumped by 386%
Target (Rp) Rp2,050 q/q to reach 8.1k tonnes, as Antam booked delayed sales from 1Q10.
IDX Index 3122
Our View
Historical Chart Antam posted an ASP of US$9.38/lb (US$20.7k/tonne) in 1H10 for
FeNi, which was higher than our estimated ASP and LME assumptions
(Rp) (Million shares)
2,800 Volume (mil. shares) Close 160.0
140.0
of US$8.8/lb and US$9.1/lb. During this period, the average LME price
2,600
2,400
120.0 was US$21.3/tonne. We leave our nickel price assumption unchanged;
100.0
2,200 80.0
we believe that the nickel price would moderate in 2H10 on the back
2,000
60.0
40.0
of an increased supply from new mines such as Goro with a design
1,800
20.0 capacity of 60k tonnes. The resumption of production at Sudbury Bay
1,600 0.0
2-Sep-09 23-Oct-09 10-Dec-09 2-Feb-10 23-Mar-10 10-May-10 28-Jun-10 16-Aug-10 might add another 43k tonnes to the global supply in 2H10.
Sales dipped by 2% y/y to Rp4.32t as Antam wound down its gold
Performance 1m 3m 6m
Absolute (%) ‐1.2 8.8 0.0
trading activity. Gold production, however, inched up by 4% y/y to
Relative (%) ‐3.2 ‐5.4 ‐21.2 1,412kg (45.4k Toz) due to the higher production at Pongkor and the
new addition from Cibaliung. Gold price also looks strongly entrenched
at US$1.2k/Toz, above our estimate of US$1.15k/Toz. We see little
Stock Information
threat of a deep price correction as uncertainties about the economic
Ticker code ANTM recovery remain and the preference for a safe haven remains high.
Market cap (US$m) 2,222
52‐week high (Rp) 2,675 Action & Recommendation
52‐week low (Rp) 1,650
Shares issued (m) 9,538 We leave our forecast and the TP of Rp2,050 unchanged for now. We
6m avg d.vol (US$m) 7.6 are still concerned about Antam’s future downstream projects.
Free float (%) 35.0 Without them, the company cannot unlock the value of its reserves.
Major shareholders (%)
Government of RI (65.0)
Our HOLD recommendation remains. At present, the stock is trading at
INDONESIA
2011F PER of 11.8x and EV/EBITDA of 7.4x.
Year End Dec 31 2008 2009 2010F 2011F 2012F
Sales (Rp b) 9,592 8,711 8,879 9,808 9,908
Pre‐tax (Rp b) 1,930 784 1,910 2,266 2,059
Key Indicators
Net profit (Rp b) 1,382 604 1,432 1,700 1,544
ROE (%) 16.5 EPS (Rp) 143 63 150 178 162
Net gearing (%) Net cash EPS growth (%) (73.3) (55.8) 137.0 18.7 (9.1)
NTA (Rp b) 11,096 PER (x) 14.6 33.1 14.0 11.8 13.0
Interest cover (x)
193.4 EV/EBITDA (x) 8.8 12.1 8.2 7.4 8.0
Yield (%) 10.2 2.7 1.2 2.9 3.4
SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS
Aneka Tambang 3 September 2010
Figure 1: Antam’s 1H10 result
(Rp b) 1H10 1H09 % chg 2Q10 2Q09 % chg 1Q10 % chg
y/y y/y q/q
Sales 4,315 4,406 (2) 2,660 1,764 51 1,655 61
COGS (2,909) (3,959) (27) (1,728) (1,479) 17 (1,181) 46
Gross profit 1,406 447 214 932 285 227 474 96
Opex (318) (248) 28 (187) (141) 33 (131) 43
Operating profit 1,089 199 447 745 144 417 343 117
EBT 1,032 275 275 761 168 353 271 181
Tax expense (277) (57) 384 (207) (39) 432 (70) 194
Net profit 756 224 238 554 134 314 202 175
Gross margin (%) 32.6 10.2 35.0 16.2 28.7
Operating margin (%) 25.2 4.5 28.0 8.2 20.7
Net margin (%) 17.5 5.1 20.8 7.6 12.2
Source: Company data, Kim Eng
Figure 2: Antam’s operating metrics
Production volume 1H10 1H09 % chg 2Q10 2Q09 % chg 1Q10 % chg
y/y y/y q/q
FeNi (Tni) 9,252 6,082 52 4,841 2,786 74 4,411 10
Nickel ore (k wmt) 3,393 2,835 20 1,833 1,777 3 1,561 17
Gold (kg) 1,412 1,359 4 731 644 14 681 7
Sales volume
FeNi (Tni) 9,743 7,075 38 8,080 5,914 37 1,663 386
Nickel ore (m wmt) 2,721,497 2,347,925 16 1,420,028 1,545,986 (8) 1,301,469 9
Gold (kg) 3,403 7,454 (54) 1,355 1,449 (6) 2,048 (34)
ASP
FeNi (US$/tonne) 20,679 12,147 70 20,679 12,478 66 20,679 0
Gold (US$/kg) 1,157 926 25 1,173 916 28 1,133 4
Source: Company data, Kim Eng
2
Aneka Tambang 3 September 2010
Profit and loss Cash flow
YE Dec (Rp b) 2008 2009 2010F 2011F 2012F YE Dec (Rp b) 2008 2009 2010F 2011F 2012F
Sales 9,592 8,711 8,879 9,808 9,908 Operating cash flow 1,052 964 1,832 1,917 2,126
Cost of goods sold (6,941) (7,513) (6,637) (7,151) (7,312) Net Profit 1,368 604 1,432 1,700 1,544
Gross Profit 2,651 1,198 2,242 2,657 2,596 Depreciation & amortisation 541 873 625 684 983
Operating expenses (1,197) (610) (781) (852) (839) Change in working capital (200) (125) 131 (177) (140)
Operating Profit 1,454 588 1,461 1,806 1,758 Others (657) (388) (356) (291) (262)
Net interest 129 104 128 100 (94) Investment cash flow (462) (639) (1,109) (4,009) (5,809)
Interest income 180 151 139 158 126 Net capex (348) (649) (1,100) (4,000) (5,800)
Interest expense (50) (47) (11) (59) (220) Chg in other non curr assets (103) 19 0 0 0
Pretax income 1,930 784 1,910 2,266 2,059 Others (10) (9) (9) (9) (9)
Income taxes (547) (189) (477) (567) (515) Cash flow after invt. 590 325 723 (2,092) (3,683)
Minority Interest (1) 9 0 0 0 Financing cash flow (2,050) (836) (328) 1,448 2,335
Net profit 1,382 604 1,432 1,700 1,544 Change in equity 43 49 (93) 0 0
EBITDA 1,995 1,460 2,086 2,490 2,741 Cash dividend paid (2,053) (547) (242) (573) (680)
EPS 143 63 150 178 162 Net change in debt (106) (335) (240) 760 2,000
Source: Company data, Kim Eng estimates Change in other LT liab. 66 (3) 247 1,261 1,014
Net cash flow (1,460) (511) 396 (644) (1,349)
Source: Company data, Kim Eng estimates
Balance sheet
YE Dec (Rp b) 2008 2009 2010F 2011F 2012F
Total assets 10,245 9,940 11,096 14,263 18,185 Key ratios
Current assets 5,820 5,437 5,685 5,210 4,019
Cash & ST Investment 3,284 2,774 3,169 2,525 1,177 YE Dec 2008 2009 2010F 2011F 2012F
Inventories 1,391 1,171 1,143 1,215 1,282 Growth (% y/y)
Account receivable 595 818 792 841 887 Sales (20.1) (9.2) 1.9 10.5 1.0
Others 549 675 580 629 674 OP (78.6) (59.6) 148.7 23.6 (2.7)
Non current assets 4,426 4,503 5,411 9,053 14,166 EBITDA (72.4) (26.8) 42.9 19.3 10.1
Net fixed assets 2,890 2,891 3,526 6,897 11,774 NP (73.3) (55.8) 137.0 18.7 (9.1)
Others 1,535 1,613 1,885 2,156 2,392 EPS (73.3) (55.8) 137.0 18.7 (9.1)
Total liabilities 2,131 1,748 1,557 2,338 4,380 Profitability (%)
Current liabilities 726 748 731 483 701 Gross margin 27.6 13.8 25.3 27.1 26.2
Account payable 131 159 153 151 158 Operating margin 15.2 6.7 16.5 18.4 17.7
ST borrowings 256 240 240 0 200 EBITDA margin 20.8 16.8 23.5 25.4 27.7
Others 340 349 338 332 343 Net Profit margin 14.3 6.9 16.1 17.3 15.6
Long‐term liabilities 1,405 1,001 826 1,854 3,679 ROA 12.3 6.0 13.6 13.4 9.5
Long‐term debts 558 240 0 1,000 2,800 ROE 16.3 7.5 16.5 17.3 14.3
Others 847 761 826 854 879 Stability
Minority interest 51 43 292 1,552 2,567 Gross debt/equity (%) 10.1 5.9 2.6 9.6 26.7
Shareholder's equity 8,063 8,149 9,246 10,373 11,238 Net debt/equity (%) (30.6) (28.2) (31.7) (14.7) 16.2
Paid‐in capital 954 954 954 954 954 Int. coverage (x) 39.6 31.0 193.4 42.5 12.5
Reserve 7,055 7,091 8,282 9,409 10,273 Current ratio (x) 8.0 7.3 7.8 10.8 5.7
Others 54 104 10 10 10 Quick ratio (x) 4.5 3.7 4.3 5.2 1.7
Gross debt (Rp b) 814 479 240 1,000 3,000
Source: Company data, Kim Eng estimates Net debt (Rp b) (2,470) (2,294) (2,929) (1,525) 1,823
Per share data (Rp)
EPS 143 63 150 178 162
CFPS (153) (54) 41 (67) (141)
BVPS 845 854 969 1,088 1,178
SPS 1,006 913 931 1,028 1,039
EBITDA/share 209 153 219 261 287
DPS 215 57 25 60 71
Source: Company data, Kim Eng estimates
3
ANALYSTS’ COVERAGE / RESEARCH OFFICES
SINGAPORE MALAYSIA PHILIPPINES
Stephanie WONG Head of Research YEW Chee Yoon Head of Research Ricardo PUIG Head of Research
Regional Head of Institutional Research +603 2141 1555 cheeyoon@kimengkl.com +63 2 849 8835 ricardo_puig@atr.com.ph
+65 6432 1451 swong@kimeng.com Strategy Strategy
Strategy Banks Property
Small & Mid Caps Telcos Telcos
Gregory YAP Property Laura DY‐LIACCO
+65 6432 1450 gyap@kimeng.com Conglomerates & others +63 2 849 8840 laura_dyliacco@atr.com.ph
Conglomerates LIEW Mee Kien Utilities
Technology & Manufacturing +603 2141 1555 meekien@kimengkl.com Conglomerates
Transport & Telcos Gaming Lovell SARREAL
Rohan SUPPIAH Media +63 2 849 8841 lovell_sarreal@atr.com.ph
+65 6432 1455 rohan@kimeng.com Power Consumer
Airlines Construction Media
Marine & Offshore Research Team Kenneth NERECINA
Pauline LEE +603 2141 1555 +63 2 849 8839 kenneth_nerecina@atr.com.ph
+65 6432 1453 paulinelee@kimeng.com Food & Beverage Conglomerates
Bank & Finance Manufacturing Cement
Consumer Plantations Ports/ Logistics
Retail Tobacco Katherine TAN
Wilson LIEW Technology +63 2 849 8843 kat_tan@atr.com.ph
+65 6432 1454 wilsonliew@kimeng.com Banks
Hotel & Resort INDONESIA Construction
Property & Construction Katarina SETIAWAN Head of Research
Anni KUM +6221 2557 1125 ksetiawan@kimeng.co.id REGIONAL
+65 6432 1470 annikum@kimeng.com Consumer Luz LORENZO Economist
Industrials Infra +63 2 849 8836 luz_lorenzo@atr.com.ph
REITs Shipping Economics
James KOH Strategy
+65 6432 1431 jameskoh@kimeng.com Telcos ONG Seng Yeow
Infrastructure Others +65 6432 1832 ongsengyeow@kimeng.com
Resources Ricardo SILAEN Regional Products & Planning
Eric ONG +6221 2557 1126 rsilaen@kimeng.co.id
+65 6432 1857 ericong@kimeng.com Auto
Marine & Offshore Energy TAIWAN
David LOOMIS Heavy Equipment Gary Chia
+65 6432 1417 dloomis@kimeng.com Property Head of Greater China Research
Special Situations Resources +886 2 3518 7900 gary.chia@yuanta.com
Rahmi MARINA Boris Markovich
HONG KONG / CHINA +6221 2557 1128 rmarina@kimeng.co.id COO, Greater China Research
Edward FUNG Head of Research Banking +852 3969 9518 boris.markovic@yuanta.com
+852 2268 0632 edwardfung@kimeng.com.hk Lucky ARIESANDI, CFA John Brebeck, CFA
Power +6221 2557 1127 lariesandi@kimeng.co.id Head of Taiwan Strategy
Construction Cement Head of Research, Taiwan
Norman ZHANG Construction +886 2 3518 7906 john.brebeck@yuanta.com
+852 2268 0631 normanzhang@kimeng.com.hk Pharmaceutical George Chang, CFA
Technology Retail Head of Upstream Tech
Mid‐caps Adi N. WICAKSONO +886 2 3518 7907 george.chang@yuanta.com
Ivan CHEUNG +6221 2557 1130 anwicaksono@kimeng.co.id Vincent Chen
+852 2268 0634 ivancheung@kimeng.com.hk Generalist Head of Downstream Tech
Property Arwani PRANADJAYA +886 2 3518 7903 vincent.chen@yuanta.com
Industrial +6221 2557 1129 apranadjaya@kimeng.co.id Dennis Chan – NB Supply Chain
Ivan LI Technical analyst +886 2 3518 7913 dennis.chan@yuanta.com
+852 2268 0641 ivanli@kimeng.com.hk Andrew C Chen – IC Backend
Banking & Finance VIETNAM +886 2 3518 7940 andrew.chen@yuanta.com
TAM Tsz Wang Nguyen Thi Ngan Tuyen Ellen Chiu – Taiwan Consumer
+852 2268 0636 tamtszwang@kimeng.com.hk +84 838 38 66 36 x 163 tuyen.nguyen@kimeng.com.vn +886 2 3518 7936 ellen.chiu@yuanta.com
Telcos Pharmaceutical Danny Ho – Taiwan Petrochemical
Green Energy Confectionary and Beverage +886 2 3518 7923 danny.ho@yuanta.com
Jacqueline KO Oil and Gas Min Li – Alternative Energy
+852 2268 0633 jacquelineko@kimeng.com.hk Ngo Bich Van +852 3969 9521 min.li@yuanta.com
Consumer Staples +84 838 38 66 36 x 164 van.ngo@kimeng.com.vn May Lin – Taiwan Telecom
Grace DAI Bank +886 2 3518 7942 may.lin@yuanta.com
+852 2268 0640 gracedai@kimeng.com.hk Insurance Tess Wang – Taiwan Financials
Metal Nguyen Quang Duy +886 2 3518 7901 tess.wang@yuanta.com
+84 838 38 66 36 x 162 duy.nguyenquang@kimeng.com.vn
INDIA Shipping
Jigar SHAH Head of Research Seafood
+91 22 6623 2601 jshah@kimeng.com Rubber
Oil & Gas Trinh Thi Ngoc Diep
Transportation +84 838 38 66 36 x 166 diep.trinh@kimeng.com.vn
Anubhav GUPTA Property
+91 22 6623 2605 agupta@kimeng.com Construction
Property
Capital goods THAILAND
Rohit LEDWANI Kanchan KHANIJOU
+91226623 2625 rohit@kimeng.co.in + 662 658 6300 x 4750 kanchan@kimeng.co.th
Banking and Financial services Banks
Nikhil AGARWAL Construction Materials
+91226623 2611 nikhil@kimeng.co.in Nathavut SHIVARUCHIWONG Recommendation definitions
Cement + 662 658 6300 x 4730 nathavut@kimeng.co.th
Metals Property
Our recommendation is based on the
Haripreet BATRA Shipping following expected price
+91226623 2606 haripreet@imeng.co.in
Software performance within 12 months:
Education
Ganesh RAM +15% and above: BUY
+91226623 2607 ganeshram@kimeng.co.in
Telecom ‐15% to +15%: HOLD
Media ‐15% or worse: SELL
4
Aneka Tambang 3 September 2010
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AND
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5
Aneka Tambang 3 September 2010
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6
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