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Good morning,
Delta Dunia Makmur –
Weak September’17 coal production. Solid 3Q17 production
¨ Weak September’17
coal production.
Delta Dunia (DOID IJ, Buy, TP: IDR1,500) booked overburden removal of 29.7m
BCM (+11.7% YoY, -3.3% MoM) and coal production of 3.1m tonnes (-3.1% YoY,
-16.2% MoM) in September 2017. Management states unfavorable weather
condition in September as the main reason.
¨ Solid 3Q17
production.
Delta Dunia booked quarterly overburden removal of 91.4m BCM (+11.7% YoY,
+10.0% QoQ) and coal production of 10.4m tonnes (+11.8% YoY, +4.0% MoM) in
3Q17. This indicates that Delta Dunia should book improvement in its 3Q17
normalized earnings.
¨ 9M17 operational
performance is below expectation. Delta Dunia’s 9M17 Overburden removal of
257.6m BCM represented 72% of our FY17 expectation of 357m BCM (vs management
guidance of 360m BCM – 400m BCM). Meanwhile, Delta Dunia’s 9M17 coal
production of 30.6m coal represented 69.5% of our FY17 expectation of 44m BCM
(vs management guidance of 45m tonnes – 50m tonnes).
¨ Third tier mining
contracting fees throughout 2017. Delta Dunia is likely to book third tier
mining contracting fees (the highest tier) throughout 2017 as coal price is
likely above USD75/tonne throughout 2017. This should benefit its EBITDA. (Hariyanto Wijaya, CFA, CPA, CMT)
Link to daily
report: Indonesia Morning Cuppa 241017
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Sector Update:
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Consumer – Government stimulus may benefit
consumer companies
In 2018, the government is likely to give
more stimulus to low-end consumers by increasing the Social Ministry budget
to IDR34trn (from IDR17trn in APBN-P 2017).
There are at least two subsidies which will
be disbursed via Social Ministry:
1) Family Prosperous Card, IDR18.5trn
(adding number of recipients to 10m families in 2018, from 6mn families in
2017).
2) Food aid program, IDR13.5trn.
We see the key
beneficiaries are companies that target low-end consumer, such as Ramayana
(RALS IJ). Cigarette companies, such as Gudang Garam (GGRM IJ) and HM
Sampoerna (HMSP IJ) would also benefit from this condition. (Andrey Wijaya)
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Media Highlights:
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Corporate
Government targets
Serang-Panimbang toll road auction to finish before year-end
Plaza Indonesia
Realty adds USD50mn loan facility
Garuda Maintenance
books USD310mn revenues in 3Q17
PP Presisi eyes
IDR2.3trn from IPO
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Our
Recent Publication:
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Economics Update: BI Pauses In October
After Easing August-September
Link to report: BI
Pauses In October After Easing August-September
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Company Update: Bekasi Fajar – Waiting On
Guidance For 9M17
Link to report: Bekasi
Fajar : Waiting On Guidance For 9M17
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Company Update: Arwana Citramulia – Revenue
Remains Robust Despite Elevated Costs
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Economics Update: September Exports
Moderate, Imports Pick Up
Link to report: September Exports
Moderate, Imports Pick Up
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Sector Update: Building Materials –
Infrastructure Projects Boost Bulk Cement Sales Growth
Link to report: Infrastructure
Projects Boost Bulk Cement Sales Growth
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Company Update: Ciputra Development – Toning Down Our
Forecasts
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Corporate News Flash: Summarecon Agung –
9M17 Marketing Sales Are In Line With Estimates
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Regional Thematic: Halal – An Earnings
Boost Strategy
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Economics Update: September Inflation
Remains Moderate
Link to report: September
Inflation Remains Moderate
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Company Update: Nippon Indosari Corpindo –
Details On Rights Issuance
Link to report: Nippon
Indosari Corpindo : Details On Rights Issuance
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Best regards,
Andrey Wijaya
Senior Vice President
Research Analyst – Auto, Consumer, Cement
PT RHB Sekuritas Indonesia
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