Harum Energy (HRUM IJ) - TP Rp9,400

Stock: Harum Energy (HRUM IJ)
Rating, Price target: O-PF, Rp 9,400
Market Cap, ADTO: US$2.4b, US$1.8m
Event: 4Q11 results announcement: below CL (-10%) and consensus (-8%)

• Harum Energy reported FY11 results after market close on March 30.
• NPAT grew 51% year on year driven by top line growth of 65%. The top line grew due to production growth (29%) and ASP growth (17%).
• ASP was 5% below our estimate whilst revenue was above due to traded coal volumes of 0.7mt. We don’t forecast any coal traded volumes as part of our numbers as the earnings impact is negligible.
• Production costs at main mine MSJ were 11% above our estimates which led to gross profit 5% below 11CL.
• The contribution from Santan Batubara (50% owned by Petrosea) was 12% below our estimates which further reduced EBIT to 10% below 11CL.
• SG&A (marketing and admin costs) were in line with CL estimates (Rp755b actual vs Rp756b estimated)
• FX gains/losses and interest/bank charges totalled –Rp16b, in line with our estimate.
• Corporate taxes totalled 23% of profit before tax, in line with our estimate of 25%.
• The company has started reporting income from associates (the contribution from Santan Batubara) above the EBIT line for which we have adjusted 2011A numbers to compare like-for-like on prior quarters.
• We look at NPAT after minority interests, but the company has informed us some estimates on Bloomberg are inclusive of minority’s claim on income.
• The stock trades on 9.9x 12CL PE, in line with the sector.

source: CLSA Asia-Pacific Markets, Bloomberg