ITMG - Records lower net profit in 1H23

ITMG - Records lower net profit in 1H23 Indo Tambangraya Megah (ITMG)'s 1H23 net profit declined by -33% yoy to USD307 mn. It was driven by lower revenue by -9% yoy, -21% qoq to USD1.3 bn, representing 50% of consensus estimate. Meanwhile, costs rose by +25% yoy derived from higher mining costs, tax and duty as well as limited royalty increase. However, fuel and lubricant inched down by -2% thanks to downtrend of oil price. Higher cost also added more pressure to margins with GPM, OPM and NPM lowered to 35%, 29% and 24%, respectively. On the other hand, ITMG managed to reduce finance costs by -2% yoy amidst high interest rate. (Source : Company) Comment : While we are waiting for management’s remarks for more details, we view that the its top line's struggled in the face of sluggish demand as well as softened coal prices. Moreover, cost pressure continued despite cool-off royalty and fuel cost. We also see that company managed to book better finance cost to lift its margin.