January mining contracting ahead our expectation
● UNTR’s overburden removal volume in January 2013 was 66 mn bcm, up 11% YoY; coal getting volume was 7.5 mn tonne, up 19% YoY, ahead of our 8% YoY growth estimate for FY13. On a monthly basis, overburden declined due to the wet season in January. We believe operational numbers from the mining contracting business will improve in the second quarter as the weather gets better. The mining contracting business is the largest contributor to EBITDA.
● There was a recovery in total heavy equipment sales volume MoM. Heavy equipment sales volume in January 2013 was 409 units, up 96% MoM from 209 units in December 2012. However, it was down 34% YoY.
● In the coal mining business, coal sales volume was 0.4 mn t in Jan 13, up 61% MoM, down 12% YoY. The coal mining business only contributes 6% of UNTR’s EBITDA on our FY13 estimate.
● We maintain our OUTPERFORM rating on the stock, and our target price of Rp28,000, implying 6.4x FY13E EV/EBITDA. UNTR remains our top pick in the mining contracting sector.
me @ LOTS Trading Club (LTC)
● UNTR’s overburden removal volume in January 2013 was 66 mn bcm, up 11% YoY; coal getting volume was 7.5 mn tonne, up 19% YoY, ahead of our 8% YoY growth estimate for FY13. On a monthly basis, overburden declined due to the wet season in January. We believe operational numbers from the mining contracting business will improve in the second quarter as the weather gets better. The mining contracting business is the largest contributor to EBITDA.
● There was a recovery in total heavy equipment sales volume MoM. Heavy equipment sales volume in January 2013 was 409 units, up 96% MoM from 209 units in December 2012. However, it was down 34% YoY.
● In the coal mining business, coal sales volume was 0.4 mn t in Jan 13, up 61% MoM, down 12% YoY. The coal mining business only contributes 6% of UNTR’s EBITDA on our FY13 estimate.
● We maintain our OUTPERFORM rating on the stock, and our target price of Rp28,000, implying 6.4x FY13E EV/EBITDA. UNTR remains our top pick in the mining contracting sector.
me @ LOTS Trading Club (LTC)
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