Daily Brief Indonesia: Indo Tambangraya Megah, Pt Cikarang Listrindo Tbk and more

• Indo Tambangraya Megah (ITMG IJ)  reported FY24 revenues of $2.3 billion and profits of $374 million, reflecting declines of 3% and 25%, respectively, consistent with expectations amid lower coal prices.
• The company will encounter higher costs in FY25 as the B40 biodiesel mandate takes effect. This is expected to put pressure on margins for all coal producers.
• Alongside declining coal prices, we anticipate profits will fall to $250-300 million. This positions the stock at an FY25 PE of 5- 6.5x with a 12-13% dividend yield.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Cikarang Listrindo
• Commerce Secretary Howard Lutnick said the Trump administration could announce some tariff relief for Mexican and Canadian goods as soon as today, after US President Donald Trump’s sweeping tariffs on Mexican and Canadian imports took effect yesterday.
• “Both the Mexicans and the Canadians were on the phone with me all day today trying to show that they’ll do better, and the president’s listening, because you know he’s very, very fair and very reasonable”, Mr Lutnicksaid in an interview with Fox Business yesterday.

Cikarang Listrindo (CL) is Indonesia’s oldest independent power producer, with 1,144 MW of capacity. The company has two natural gas-fired plants with a combined installed capacity of 864 MW, and a 280 MW coal-fired plant. It is the sole electricity provider to c. 2,700 tenants across five industrial estates in Cikarang. It was listed on the Indonesia Stock Exchange in June 2016. The Joso, Brasali and Sofyan families own over 80% of the company.