PTBA - Expect higher profit in 2H24

KBVS Update
Thursday, 15 Aug 2024

PTBA-Expect higher profit in 2H24
(Upgrade BUY; TP: IDR:3,080)

PTBA reported a 1H24 net profit of IDR 2.03 tn, down 26.8% yoy, despite a 15% increase in 2Q24 revenue driven by higher sales volume. The lower profit was mainly due to a 4.3% drop in coal ASP and a significant 72.6% decline in income from associates. As a result, the 1H24 net profit was below consensus expectations but above our forecasts.

The recent spike in Newcastle coal prices is unlikely to raise ASP in 3Q24 significantly qoq, as demand from China and India remains stable and supply is ample. A slight rebound in ICI 3 and ICI 4 coal prices might occur in 4Q24 due to increased energy demand during winter.

Expect higher profit in 2H24, driven by slightly improved coal prices and increased sales volume from new export market initiatives. Additionally, the reduction in cash costs due to the depletion of older, higher-cost inventory is expected to further enhance profitability. Given the positive outlook and better-than-expected 1H24 results, we raised net profit forecast for FY24 to IDR 4.3 tn.

We upgrade our call to BUY, on the back of higher FY24 net profit forecast to IDR 4.3 tn and a higher long-term Newcastle coal price assumption of USD100/tonne in 2028 (previously USD 90/ tonne).

Regards,
Benyamin Mikael - KBVS Research