Sustaining Growth Momentum
Key Takeaways
• PTBA’s bottom line jumped +246.14% YoY to IDR6.16 trillion in 1H22 on the back of company’s success to maintain cash cost at manageable level of IDR749 thousand/ton. Cash cost only rose 3.1% QoQ to IDR760 thousand/ton in 2Q22 (vs IDR737 thousand/ton in 1Q22). PTBA successfully lower its stripping ratio to 5.2x in 2Q22 (vs 6.3x in 1Q22), overall implied stripping ratio for 1H22 was 5.6x.
• PTBA noted that exports to India increased 2 million tons YoY (accounting for 18% from total sales volume), and followed by an increase in SEA & East Asia Countries that contributed to 12% from total sales volume.
• PTBA had exported coal to Italy for IDR236.89 billion in 1H22 or contributed about 1% of total revenue. Until FY22E, we expect PTBA to be able to add other export destinations in Europe, such as Germany which reportedly asked for Indonesian coal supply of 5-6 million tons.
• Nevertheless, the key success will depend on whether PTBA coal meet the specification for European market which mostly demand higher calorific value.
• In order to support Net Zero Emission in FY60F, PTBA uses electric vehicles for its mining operations. So far, the company had used 7 Shovel Electric and 40 Haul Dump (HD) Hybrids, therefore reducing carbon emissions by an average of 17 thousand tons of CO2e per year.
• In respond to the fulfillment of domestic coal supply, recently government through MEMR plans to establish Public Service Agency (BLU) for coal industry.
• We maintain our recommendation BUY, with a higher TP: IDR5,000/share. PTBA is currently trading at +1.5STD at 2.21x PBV forward (3-year average).
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