The aluminum smelter is scheduled to commence operations in stages. Phase 1 commissioning is targeted for the end of 2025, with 500 ktpa of ingots produced within the North Kalimantan Industrial Park. Capacity is slated to ramp to 1.5Mtpa by 2027, supporting downstreaming and import substitution.

Declining metallurgical coal prices have pressured ADMR’s financial performance. Revenue declined 26.87% YoY to US$443m while cost of revenue decreased 4.81% to US$263m, so GPM declined to 40.59% (from 54.36%). Net profit declined 43.05% YoY with NPM at 39.01% (vs 40.83%), as weaker ASPs outweighed limited cost relief.

ADMR’s production volume and selling prices have grown steadily. FY24 production rose 29.75% to 6.63Mt and sales increased 26.01% to 5.62Mt, highlighting robust operational throughput. FY25E volume guidance of 5.6–6.1Mt reflects normalization as prices stabilize around US$100–110/ton.

Stable demand is supporting price stability. Global output reached 73.01Mt in FY24 (+3.24% YoY) while LME prices peaked at US$2,798.50 on 9 Oct with October ASP at US$2,584.57. The 16 Oct close at US$2,746.00 (+6.25% YoY) signals firm demand and supportive sentiment despite higher supply.

ADMR reduced its cash cost by 2% YoY. Savings were driven by a 7% drop in royalties to US$146.99m and a 5% decline in fuel cost per liter. These offsets partially absorbed inflation in mining (+26%), processing (+24%), and transport/handling (+16%) costs.

Using the Sum-of-the-Parts (SOTP) method, with a Required Return of 6.43% and a Terminal Growth of 4.23%, we estimate ADMR’s fair value at Rp1,490 (P/E and P/BV, 11.32x / 1.67x).

By PHINTRACO SEKURITAS | Research
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