PT Indika Energy (INDY) Q3 2024 earnings summary

Executive summary

• Revenue for 9M24 declined 22.4% year-over-year to $1,784.2m, with net profit down 63.3% to $34.4m, reflecting lower coal prices and divestment impacts.

• Gross profit margin declined to 15.1% from 19.1% year-over-year, due to lower coal prices and higher costs.

• Major divestments included the $218m sale of MUTU and $1.5m sale of MEA, reducing coal revenue and emissions.

• Diversification is accelerating, targeting 50% non-coal revenue by 2028, with investments in renewables, EVs, minerals, digital, and healthcare.

• Strong cash position of $898m as of September 2024, with prudent financial management and ongoing debt reduction.

Financial highlights

• 9M24 revenue fell 22.4% year-over-year, mainly due to lower ASPs and the absence of MUTU's contribution post-divestment.

• Net profit attributable to owners was $34.4m, down from $93.8m year-over-year.

• Adjusted EBITDA for 9M24 was $189.0m, down 37.8% year-over-year.

• Basic EPS was $0.0066 for 9M24, compared to $0.0180 for 9M23.

• Cash and cash equivalents were $706.3m as of September 30, 2024.

Outlook and guidance

• Management expects continued volatility in coal prices and regulatory uncertainty in Indonesia.

• 2024 production guidance for Kideco is 29.4MT, with a strip ratio of 5.7x; average selling price expected at $62.3/ton, down 19.9% year-over-year.

• Indonesian government raised 2024 coal production target to 922MT, with DMO requirement at 25% and price cap at $70/ton.

• Ongoing capital expenditure and project development in green business, battery, and electric vehicle segments.

• La Nina may impact Q4 production, typically reducing output by 6-8% sequentially.