BWPT
Contact our analyst Achmadi
BUY
25th April 2025
Current price Rp 56
Target price Rp 79
25th April 2025
Current price Rp 56
Target price Rp 79
A Challenging Year Marked by Productivity Gain
In 2024, BWPT faced weather-related challenges, with total FFB production (including plasma) declining 8.73% YoY to 1,041,514 MT, mainly due to the impact of El Niño. Consequently, CPO and PK production fell by 17.63% and 17.01% YoY, respectively. Despite lower output, the company achieved an 8% YoY increase in FFB yield, though CPO yield declined 2% YoY. Mill efficiency improved, with the Oil Extraction Rate (OER) rising to 23.57% and the Kernel Extraction Rate (KER) to 4.40%, up from 22.96% and 4.25% in the previous year. By year-end 2025, BWPT targets a 5.95% increase in production, with further improvements in OER to 23.95% and KER to 4.47%.
In 2024, BWPT faced weather-related challenges, with total FFB production (including plasma) declining 8.73% YoY to 1,041,514 MT, mainly due to the impact of El Niño. Consequently, CPO and PK production fell by 17.63% and 17.01% YoY, respectively. Despite lower output, the company achieved an 8% YoY increase in FFB yield, though CPO yield declined 2% YoY. Mill efficiency improved, with the Oil Extraction Rate (OER) rising to 23.57% and the Kernel Extraction Rate (KER) to 4.40%, up from 22.96% and 4.25% in the previous year. By year-end 2025, BWPT targets a 5.95% increase in production, with further improvements in OER to 23.95% and KER to 4.47%.
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Strong Profitability Driven by Digitalization and Cost Control
In 2024, BWPT delivered strong profitability, supported by digital initiatives and cost efficiencies. Net profit attributable to the parent rose 46.99% YoY to IDR 260.21 billion, driven by a 2.33% increase in revenue and a 3.15% reduction in COGS. Cost savings were supported by a 38.27% drop in FFB purchases and a 21.68% decline in mill bulking costs. Interest expenses also decreased 15.06%, aided by a shift toward market-based debt financing. For 2025, net profit is projected to grow 28.40% YoY, with revenue expected to rise 3.29% YoY.
Enhanced Solvency through Strategic Financing
BWPT significantly improved its balance sheet, with the Debt-to-Equity Ratio (DER) falling to 1.80x in December 2024, from 2.34x in the prior year. This was achieved through a shift from traditional bank loans to corporate bond issuance. In July 2024, BWPT issued “Obligasi Berkelanjutan I Tahap I Tahun 2024” worth IDR 61.85 billion, maturing July 2025 at a 9.75% annual coupon. In February 2025, it followed with “Obligasi Berkelanjutan I Tahap II Tahun 2025” totaling IDR 30.09 billion, split between:
• Series A: IDR 23.92 billion at 9.75%, 1-year maturity
• Series B: IDR 6.17 billion at 11%, 3-year maturity
By the end of 2025, the DER is expected to improve further to 1.63x.
Strategic Growth and Financial Restructuring in 2025
BWPT plans to commission a new mill in East Kalimantan and expand Kernel Crushing Plant (KCP) operations, expected to come online in H1 2025. It is also increasing its renewable energy efforts through the expansion of biogas power plants to support KCP operations. Additionally, BWPT will address its accumulated losses of IDR 4.07 trillion via a quasi-reorganization using Additional Paid-in Capital, eliminating negative retained earnings. This restructuring is expected to improve the financial profile, potentially enable future dividend distributions, and enhance share liquidity by attracting new investors.
Valuation: BUY, TP IDR 79
Following the FY-2024 results, we revise our EV/EBITDA target to 4.54x and maintain our BUY recommendation with a target price of IDR 79/share, reflecting a 7.36x PER and offering 41.03% upside potential.
In 2024, BWPT delivered strong profitability, supported by digital initiatives and cost efficiencies. Net profit attributable to the parent rose 46.99% YoY to IDR 260.21 billion, driven by a 2.33% increase in revenue and a 3.15% reduction in COGS. Cost savings were supported by a 38.27% drop in FFB purchases and a 21.68% decline in mill bulking costs. Interest expenses also decreased 15.06%, aided by a shift toward market-based debt financing. For 2025, net profit is projected to grow 28.40% YoY, with revenue expected to rise 3.29% YoY.
Enhanced Solvency through Strategic Financing
BWPT significantly improved its balance sheet, with the Debt-to-Equity Ratio (DER) falling to 1.80x in December 2024, from 2.34x in the prior year. This was achieved through a shift from traditional bank loans to corporate bond issuance. In July 2024, BWPT issued “Obligasi Berkelanjutan I Tahap I Tahun 2024” worth IDR 61.85 billion, maturing July 2025 at a 9.75% annual coupon. In February 2025, it followed with “Obligasi Berkelanjutan I Tahap II Tahun 2025” totaling IDR 30.09 billion, split between:
• Series A: IDR 23.92 billion at 9.75%, 1-year maturity
• Series B: IDR 6.17 billion at 11%, 3-year maturity
By the end of 2025, the DER is expected to improve further to 1.63x.
Strategic Growth and Financial Restructuring in 2025
BWPT plans to commission a new mill in East Kalimantan and expand Kernel Crushing Plant (KCP) operations, expected to come online in H1 2025. It is also increasing its renewable energy efforts through the expansion of biogas power plants to support KCP operations. Additionally, BWPT will address its accumulated losses of IDR 4.07 trillion via a quasi-reorganization using Additional Paid-in Capital, eliminating negative retained earnings. This restructuring is expected to improve the financial profile, potentially enable future dividend distributions, and enhance share liquidity by attracting new investors.
Valuation: BUY, TP IDR 79
Following the FY-2024 results, we revise our EV/EBITDA target to 4.54x and maintain our BUY recommendation with a target price of IDR 79/share, reflecting a 7.36x PER and offering 41.03% upside potential.
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