Research & Stock Picks

Company Reports

06 December 2024

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Bumi Resources (BUMI): IDR 140 – BUY, SSI TP: IDR 170; Cons. TP: IDR 170

Our take on the results (Bottom-line Above, Operating in-line)

  • In 3Q24, BUMI posted solid revenue of USD 331mn (+16.2% QoQ, +15% YoY) on higher ASP at USD 72/ton (+3.6% QoQ, +27.2% YoY) on the back of favorable sales mix despite mixed sales volume performance reaching 4.6 Mt (+12.2% QoQ, -9.8% YoY) due to rains and market conditions.
  • Efficient mining activities enabled BUMI to reduce its stripping ratio (3Q24: 7.3x; -1.4% QoQ, -24.7% YoY) and mining costs (USD 203mn; -16.5% YoY, OB removal: 37.5 Mbcm), leading to improved production (+22.6% QoQ, +0.5% YoY) and cash margin (USD 64/ton; +2.5% QoQ, +1.5% YoY).
  • On the bottom-line, higher interest income (+15.3% QoQ) and USD 18mn income tax benefit lifted the company’s net profit margin to 11.5% (+540 bps QoQ).
  • In terms of production, we project FY24 volumes to decline to c.19 Mt (c.-20.8% YoY) due to adverse weather conditions expected in the latter part of the year, which could disrupt mining operations.
  • Valuation-wise, we maintain our BUY recommendation on BUMI with TP of IDR 170 (DCF-based), reflecting 2025F P/E of 23.3x. Key risks to our recommendation include operational disruptions, increased adoption of renewable energy, and declining coal prices on global economic slowdown next year.

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TR_BUMI 3Q24

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