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Company Reports

16 August 2024

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ITMG: 2Q24 Results – HOLD, TP at IDR 26,000

Strength

Higher sales volumes of 5.8 Mt (+7.4% YoY, +16% QoQ) and robust cash margin growth of +27% QoQ; the drop in stripping ratio to 10.5x (-16% YoY, -0.9% QoQ) led to EBITDA margin improvement to 20.8% (+200 bps QoQ)

Weakness

YoY decline in 2Q24 earnings driven by lower ASP of USD 94/ton (-17.2% YoY, -3.1% QoQ), higher mining costs of USD 17 million (+25% QoQ, +280% YoY), and elevated freight costs of USD 12 million (+12% QoQ, +241% YoY), resulting in lower 2Q24 cash margin of USD 19/ton (-43.3% YoY)

Opportunity

Production commencement at Graha Panca Karsa (1.0 Mt) and Tepian Indah Sukses (0.4 Mt) may raise FY24F output to 19.85 Mt, may boost 2H24 sales volumes; buying opportunity may arise if further recent market underperformance persists, pricing in 2Q weak results

Threat

Global shipping shortage drives up coal export costs, affecting 78% of ITMG’s sales volumes; worldwide economic slowdown and the emergence of cheaper alternative natural resources may affect 2H24 coal prices, further pressuring earnings

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Results ITMG 2Q24

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Results ITMG 2Q24

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