BUMI
Contact our analyst Revita
49% upside. BUY
16th September 2022
Current price Rp 181
Target price Rp 270
Targeting 9% yoy production growth
As of 1H22, BUMI’s combined production volume was 34.5 Mt, down -14% YoY compared to 40.1Mt in 1H21. Coal sales volume also declined -16% yoy to 33,8Mt in 1H22. The decrease in coal sales volume was offset by higher FOB coal prices, up by 92% in 1H22. Based on PSAK 66, BUMI’s revenue consolidates Arutmin but equity accounts for KPC. Based on that, 1H22 revenue was USD 969 mn or up by 130% YoY. We estimate CAGR revenue growth for BUMI during 2022F will be 101% YoY, based on PSAK 66 and inline with higher coal prices, while combined production will grow an average CAGR of 6% to reach 86mn tons and 88.6 mn tons in 2022F and 2023F respectively compared to 2021A, which means an increase of 9% this year.
Debt reduction
Since BUMI’s debt restructuring process started in 2017, BUMI has reduced its interest bearing debt from USD 1.36bn in 2021A to USD 1.2bn in 1H22. BUMI’s equity started to improve with the deficit attributable to owners decreasing from 2020 to 2021A as shown in the Balance sheet below. BUMI is targeting to be debt free in 2023, by which time all long term loans of tranche A,B,C (CDB) and CVR of USD 1.54bn will be settled. if the EGM on Oct 11, 2022 goes as planned. We are targeting that if all goes well, then the debt to equity ratio will reduce to an average 0.77x in 2022-2023F from 2.11x in 2021A after debt payments and restructuring.
Valuation: 49% upside
With improvements in production particularly in Arutmin and debt restructuring as it shown in 1H22, we are targeting TP within one year of IDR 270 which is equal to a 10x PE using a forecast for USD/IDR of IDR 14,900 in 2023. We give BUY recomendation along with 49% upside
As of 1H22, BUMI’s combined production volume was 34.5 Mt, down -14% YoY compared to 40.1Mt in 1H21. Coal sales volume also declined -16% yoy to 33,8Mt in 1H22. The decrease in coal sales volume was offset by higher FOB coal prices, up by 92% in 1H22. Based on PSAK 66, BUMI’s revenue consolidates Arutmin but equity accounts for KPC. Based on that, 1H22 revenue was USD 969 mn or up by 130% YoY. We estimate CAGR revenue growth for BUMI during 2022F will be 101% YoY, based on PSAK 66 and inline with higher coal prices, while combined production will grow an average CAGR of 6% to reach 86mn tons and 88.6 mn tons in 2022F and 2023F respectively compared to 2021A, which means an increase of 9% this year.
Debt reduction
Since BUMI’s debt restructuring process started in 2017, BUMI has reduced its interest bearing debt from USD 1.36bn in 2021A to USD 1.2bn in 1H22. BUMI’s equity started to improve with the deficit attributable to owners decreasing from 2020 to 2021A as shown in the Balance sheet below. BUMI is targeting to be debt free in 2023, by which time all long term loans of tranche A,B,C (CDB) and CVR of USD 1.54bn will be settled. if the EGM on Oct 11, 2022 goes as planned. We are targeting that if all goes well, then the debt to equity ratio will reduce to an average 0.77x in 2022-2023F from 2.11x in 2021A after debt payments and restructuring.
Valuation: 49% upside
With improvements in production particularly in Arutmin and debt restructuring as it shown in 1H22, we are targeting TP within one year of IDR 270 which is equal to a 10x PE using a forecast for USD/IDR of IDR 14,900 in 2023. We give BUY recomendation along with 49% upside
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BUMI
