ADRO IJ / ADRO.JK | OUTPERFORM - Maintained | Share Price Rp1810 - Tgt. Rp2650
Coal Mining | - by Erindra KRISNAWAN / Peter P. SUTEDJA, CFA
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While 1Q12 earnings was a slight disappointment due to higher than expected costs from contracting business, we take comfort from the on-track progress of Adaro’s coal mining operations and the fact that it has already hedged most of its fuel needs for this year. 1Q12 core is slightly below at 18% of our FY12 and consensus. We cut FY12-13 core earnings to account for the higher cost in mining contracting. Still, given steady production growth and potential upside from MIP, maintain Outperform, though with a slightly lower SOP price target
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