Aneka Tambang (ANTM IJ)
Upside potentials from ore sales to boost FY25 earnings
- 3Q24 core profit grew slightly (+9% qoq), driven by robust gold sales, though nickel segment lagged behind due to a poor sales volume.
- ANTM has obtained 12wmt of nickel ore RKAB and targets 15wmt of production in FY25, while FeNi output remains flat.
- Maintain Buy rating with an unchanged TP of Rp2,000. Key risks include lower commodity prices, lower utilization, and project delays.
3Q figures heavily supported by robust gold sales
ANTM recorded revenue of Rp20tr, +37% qoq, driven by a record high gold sales volume of 12,598 tons, +42% qoq. Its 9M24 revenue grew to Rp43tr, +40% yoy, reaching 105%/90% of our/cons estimates. However, its nickel segment disappointed, with FeNi sales down 29% qoq and nickel ore sales flat at 0% qoq despite additional RKAB approvals throughout the quarter. Thus, we saw a decline in Gross/EBIT/Net profit margins of 1.5%/0.4%/5.8%. The decline in NPM was more apparent as ANTM also recorded an FX loss of Rp428bn through the strengthening of the IDR. The 3Q24 net profit stood at Rp651bn, -50% qoq, while core profit stood at Rp1tr, +9% qoq, which brings the 9M24 net profit to Rp2.2tr, -23% yoy, reaching 76%/91% of our/cons estimates.
3Q24: A productive quarter
ANTM had ticked off several projects in 3Q24, starting with the 30% acquisition stake in Jiulong Metal Industry’s 28ktpa NPI plant in Weda for US$102.5mn, along with a 3-year ore offtake agreement. Next, ANTM also completed an MoU with Freeport to offtake up to 32 tons of gold p.a., effective per FY25. As the gold is sourced domestically, there would be no import tariff, providing ANTM with a stronger cashflow. Finally, ANTM successfully switched the power source of its FeNi smelter from diesel to the PLN grid, which would see a cash cost decline below US$12k/ton (vs. US$12k/ton in 9M24).
FY24-26F forecast upgrades on stronger nickel ore sales
Management guides a flat FeNi volume in FY25 as the FeNi Haltim plant is still commissioning. Yet, ANTM believes there should not be any further impairments. Furthermore, ANTM has pocketed 12wmt of nickel ore RKAB, with another 3wmt to be approved by the ministry. Thus, we have revised our FY24-26 estimates accordingly and expect an increase in revenue/net profit of +38%/+3.8% in FY24 and +0.1%/+43% in FY25.
Reiterate our Buy rating with a TP of Rp2,000
We reiterate our Buy rating with an unchanged TP of Rp2,000 based on FY25F PE of 13x (vs. 16x PE previously), equal to -0.5x std of its 3-yr mean forward PE band. Key risks to our call include lower nickel prices, a lower utilization rate, and project execution delays.
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