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1Q25 results: Stellar earnings growth on higher gold prices and volumes. BRMS delivered strong 1Q25 results with net profit of USD 14mn (+303.9% YoY, +65.5% QoQ), well above our (33.3%) and consensus (35.2%) estimates, driven by ongoing gold price rally (>USD 3,000/oz). Revenue reached USD 63mn (+211.5% YoY, +17.5% QoQ), supported by higher gold sales volume of 21.9 koz (+128.1% YoY, +11.7% QoQ) from higher ore grade. Gold sales generated USD 55mn (+178.2% YoY), most of which was from HRTA, which experienced a surge in retail demand. EBITDA rose to USD 29mn (+389.8% YoY, +89.0% QoQ), supported by cash margin of USD 1,793.8/oz (+31.6% YoY) and lower opex-to-sales of 13.5%, lifting EBITDA margin to 46.5%.
Global economic slowdown, solid demand & tight supply to propel gold prices. In 2025, gold prices are expected to average USD 3,221/oz supported by several factors: 1) fear of slowing global economy with the World Bank expecting 2025F overall growth slowdown to 2.6% from 3.2% in 2024; 2) strong demand stemming from central bank buying with aggregate purchases of 1,100–1,200 tons, ETF inflows of USD 25–30bn, and retail purchases in China and India set to grow 6–7% YoY; 3) tight supply given mine output is projected to rise modestly (+1.2% to 3,660 tons), while recycled supply could drop 3.0%.
Raise our forecasts on elevated gold price; @1% hike in gold price, NP +3.2%. Entering 2Q25, we expect BRMS to sustain its earnings momentum, supported by increased dore bullion sales volumes, which we have raised from 75 koz to 93 koz (+54.2% YoY) amid strong gold demand. Additionally, we have upgraded our 2025F average gold price forecast to USD 3,221/oz (from USD 2,800/oz or up 15.0%), lifting total net profit estimate by +26.5% to USD 54mn, implying EPS growth of +110% YoY. Seperately, our sensitivity analysis shows that every 1% change in gold price drives 3.2% shift in net earnings. Additional upside comes from COD gold plant of Gorontalo Minerals in 2H26 and the shift to underground mining in 2027F, unlocking higher-grade ore and long-term earnings potential.
Reiterate BUY with higher SOTP of IDR 550 (from 500) on strong EBITDA growth of +50%. Given the current ongoing gold price rally, we maintain our positive view on BRMS, supported also by rising production and upcoming catalysts such as Gorontalo Minerals. These should help BRMS to pave the way for delivering strong results amid global economic uncertainties. BUY with SOTP target price of IDR 500, implying 52.8% upside. On valuation, BRMS trades at 2025F EV/Reserves of USD 12,183/ton. Risks: lower gold prices, operational delays, and financing issues.
Samuel Sekuritas Indonesia is a leading Indonesian securities brokerage firm. Established in 1997, the firm has grown to become one of the most respected and trusted financial services companies in the country. With a wide range of services and products, Samuel Sekuritas Indonesia has become a trusted partner to many investors, both institutional and individual.
The company offers a variety of financial services, including equity, debt and derivative securities brokerage services, research and portfolio management, asset management and capital market services, as well as a range of other investment solutions. Samuel Sekuritas Indonesia is also a leader in providing financial education and training, and has established itself as a leading provider of investor relations services.
The company has a strong research capability and is committed to providing its clients with up-to-date and reliable market analysis and recommendations. It also has a team of experienced and knowledgeable professionals who are dedicated to providing quality service to its clients. As a result, Samuel Sekuritas Indonesia has become a preferred partner for many investors in Indonesia.
In addition to its financial services, Samuel Sekuritas Indonesia also offers a range of other services, such as corporate finance and advisory services, mergers and acquisitions, and venture capital.
