DEPOK (eNBe Indonesia) - Shares of United Tractors (UNTR)—a subsidiary of Astra International engaged in construction machinery supply, coal mining contracting, own coal business, power generation, and civil construction—ended higher by 0.9% to Rp25,175 on Monday (Feb 27) as investors responded positively the company’s performance last year.
UNTR booked net profit of Rp21 trillion in 2022, surged 104% year on year (y/y), as revenue rose 56% y/y to Rp123.6 trillion.
With earning per share (EPS) of Rp5,679, the last quoted price (Rp25,175) looked very cheap. The last quoted price also reflected PBV slightly above equity, cheap for a company with return on equity (ROE) of more than 25%.
The mining contracting segment contributed 38% of revenue last year, followed by 30% from construction machinery, 25% from coal mining, and 6% from gold mining.
On construction machinery, Komatsu sales volume jumped by 86% y/y to 5,753 units in 2022, leading the market with a 28% market share.
Revenue from spare parts and maintenance services also increased by 33% to Rp10.4 trillion. In total, the construction machinery segment recorded net revenue of Rp36.5 trillion in 2022, a 60% y/y rise.
On mining contracting, PT Pamapersada Nusantara (PAMA) recorded net revenue of Rp47.4 trillion, up by 43% y/y.
PAMA recorded coal production amounting to 116 million tons, relatively the same as 2021 and a 12% increase in overburden removal volume from 852 million bcm to 954 million bcm, with an average strip ratio of 8.2x, increased from 7.3x.
On coal mining, PT Tuah Turangga Agung (TTA) recorded total coal sales volume of 9.9 million tons, increased by 10% y/y, including 2.4 million tons of metallurgical coal from PT Suprabari Mapanindo Mineral (SMM).
Coal mining segment recorded 127% increase in net revenue to Rp31.1 trillion in 2022 due to higher average coal selling price.
On gold mining, PT Agincourt Resources (PTAR)’s total sales volume of gold equivalent from Martabe was 286 thousand ounces, lower by 13% compared to 330 thousand ounces last year, due to lower grade extraction.
Gold mining segment recorded net revenue of Rp7.7 trillion, decreased by 8% from Rp8.3 trillion. The average selling price for gold was US$1,802 per ounce, increased by 2% compared to US$1,760 per ounce in 2021.
In January 2023, UNTR’s Komatsu sales 686 units, compared to 296 units in December 2022. Market share for year to date was 35%.
Sales for mining increased from 54% to 70% and sales for forestry rose from 5% to 13%. While sales for construction and agribusiness fell to 11% and 6% respectively.
UNTR’s Pamapersada Nusantara produced 8.6 million tons of coal in January 2023, higher than 7.3 million tons in previous month. Overburden removal also rose to 82.1 million bcm from 66.1 million.
Thermal coal sales volume (under Tuah Turangga Agung) jumped 74% to 840,000 tons in January 2023, from 483,000 tons in previous month. Metallurgical coal sales volume meanwhile fell 48% to 155,000 tons.
UNTR’s gold mining segment (PT Agincourt Resources) sold 19,000 tons of gold in January 2023, fell 17.4% from previous month.
Meanwhile on 3 December 2022, UNTR through its subsidiary, PT Danusa Tambang Nusantara (Danusa) signed a Conditional Shares Sale and Purchase Agreement (CSPA) to acquire 90% of the shares of PT Stargate Pacific Resources (SPR) and 90% of the shares of PT Stargate Mineral Asia (SMA).
SPR is a company that holds mining business license for nickel production operation in North Konawe, Southeast Sulawesi, which has low – high grade nickel reserves; while SMA is a company that holds license to develop and operate nickel processing facility (smelter).
This corporate action was part of the Company’s strategy to diversify and expand the business portfolio into nickel commodities.
Still, investors might have priced in possible correction of revenues/profit in heavy equipment and own coal mining segment due to downfall of coal prices in recent months.
As coal miners might record lower profit this year, they could reduce spending in heavy equipment. Gold, another key commodity for UNTR, might stabilize or move lower than last year because global economic recession might be not as bad as predicted.***
