Indika Energy: Kideco declared final dividend US$245mn (INDY, Rp3,900, Buy, TP: Rp5,400)

• Kideco reported FY10 net profit of US$316.3mn (+9.9% yoy, -15.5% qoq), represent 91.3% our forecasts and 91.1% company’s target. FY10 nett revenue of US$1.6bn, represent 98.5% our forecast or 95.9% company’s target. Below estimates results mostly due to higher cash cost (ex royalty) of US$54.5/ton, 5% higher than ours, and company prefer to be more conservative in treating its exploration cost for west Kalimantan projects which is mostly being expensed instead being capitalized to reflect the true operating cash outflow
• Kideco has declared a final dividend payment of US$245mn. Together with the US$70mn interim dividends paid in November 2010, Kideco’s total dividend payout for FY10 is US$315mn, +12.5% yoy
• With this result we expect that INDY’s FY10F net profit is likely to be reported around 10% below our estimates.
• Currently we have Buy rating on the stock, INDY now is traded at 11.9x PER11F.

Analysis by : Mandiri sekuritas