Analisa Saham ADRO | 29 Maret 2018

Analisa Saham ADRO
Yuanta (FS)

*ADRO BUY TP 3060*

ADRO team up with EMR Capital to acquire coal assets in Australia        
It is reported that ADRO along with EMR Capital has acquired a coal mine asset in Australia from Rio Tinto called Krestel with total value of AUD2.25bn. The Krestel coal mine registered an EBITDA of USD341mn and profit before tax of USD258mn in 2017. (Kontan Online)

Comment:
It is not yet available the portion ADRO is taking in the acquisition in term of ownership and financing. *However, ADRO balance sheet is in good shape with cash balance of USD1.2bn and net cash position. We believe the acquisition is positive for earnings outlook as its already in producing stage.* We are waiting for more detail on the transaction to adjust our financial forecast.

Deutsche (DB)

*ADRO/EMR buys Rio's Kestrel mine for $2.25bn, potentially strong EBITDA contribution + earning accretive deal =BUY ADRO(TP Rp3200;+56% UPSIDE)*
 
Janeman (db Indo mining analyst) has strong conviction view on ADRO - Rio deal = BUY ADRO
ADRO/EMR buys Rio's Kestrel mine for $2.25bn, *potentially strong ebitda contribution + earning accretive deal =BUY ADRO(TP Rp3200;+56% UPSIDE)*
ADRO and Australia-based PE EMR Capital have agreed to buy 80% stake in Australia coking coal underground mine Kestrel for US$2.25bn from Rio Tinto.
 
Valuation
The deal value the Kerstel mine at $2.8bn with an estimated EV/Ebitda of 4.2x-4.5x of 2017.
Kerstel's ebitda was at $426mn ($86/t) and PBT of $322mn in 2017 despite only producing 4.25mnt hard coking coal and 0.84mnt of thermal. Compare it with ADRO's 52mntpa sales only generates Ebitda of $1.3bn pa ($25/t)
Our back of the envelope calculation, assuming 10% discount to coking coal price in 2018 vs 2017 with tax rate of 30% and cost of debt of 6% pa. ADRO could get an addition of $60-$80mn to its NPAT or 9-12% addition to the estimated NPAT of $634mn. Hence, an earning accretive acquisition.
Kestrel's reserves stands at 146mnt and 241mnt of resources.

RHB (DR)

*IND: Adaro Energy (ADRO IJ, BUY, TP: IDR2,800): Acquiring Kestrel Coking Coal Mine, an Accretive Acquisition.*

Adaro Energy, together with EMR Capital, have entered into a binding agreement to acquire Rio Tinto’s 80% stake in the Kestrel coking coal mine for total cash consideration of USD2.25bn, which implying EV/coal reserves of ~USD19/tonne, which is considered a fair value, in our view.

Kestrel’s coking coal production keeps increasing, rising to 4.2m tonnes in FY17 from 3.4m tonnes in FY15 and 4m tonnes in FY16. As at end-2017, the mine has coal resources of 241m tonnes and marketable coal reserves of 146m tonnes.

*We maintain our assumptions without factoring in the Kestrel acquisition until further details emerge. We reiterate our BUY call with an unchanged IDR2,800 TP (37% upside).*