Analisa Saham ADRO | 5 Maret 2019

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ADRO 4Q18 Results Above: Maintain BUY
(Andrew Hotama - RHB) 

⁃We wrote a note on Adaro today. The company reported FY18 earnings that are 7% above both Ours and Consensus numbers on the EBIT level. 
⁃Top line declined 10% QoQ but grew 16% YoY to USD953mn, this is on the back of lower QoQ ASP (-8% QoQ, -5% YoY) but YoY higher sales volume (-2% QoQ, +22% YoY).
⁃Below EBIT, we saw a one-time, non-operational impairment charges amounted to USD111mn in 4Q18, related to the Kestrel mine Acquisition.
⁃Kestrel is showing its contributions further to Adaro's earnings (USD29mn in 4Q18 vs. Loss of USD85mn in 3Q18 due to one time non operational transaction & transition costs). We expect contributions from Kestrel to grow further in 19F (13% of 19F PBT).
⁃Maintain our BUY call on Adaro, this is on the back of the company's cheap valuations (8x 19F PE), and as we see limited downside for Adaro going forward. Note that the low cal prices have rebounded to USD40/ton recently, up from Its low of USD28/ton in December-18. This should be a good momentum for Adaro as it is the most laggard compared to the other coal players in our coverage (share prices still -25% from 2018 beginning).
Thank you!