AADI's Q1-2025 Earnings Drop, But Stock Outlook Remains Promising

PT Adaro Andalan Indonesia Tbk (AADI) posted a net profit of US$196 million in the first quarter of 2025, representing a 54% year-on-year decline. This figure accounts for just 30% of Macquarie’s full-year forecast and 24% of the analyst consensus.

Despite the drop, AADI's stock still receives a positive recommendation with a high price target. The company is also expected to distribute an interim dividend for fiscal year 2025 in the second half of the year.

According to Macquarie’s research, AADI’s revenue dropped 12% to US$1.1 billion. Gross profit fell 11% to US$347 million, EBITDA decreased 14% to US$289 million, and net income slumped 54% to US$196 million.

During the same period, coal production declined 3% to 16 million tons, while sales volume rose 6% to 16.4 million tons. The strip ratio also decreased by 13% to 3.2x.

Macquarie reported AADI's cash cost at US$42.7 per ton, with the average selling price (ASP) falling 17% to US$68 per ton.

Even though the ASP performance was weaker than expected, Macquarie considered the company's production and sales volumes in line with expectations, and the lower strip ratio provided efficiency gains.

"However, moving forward, the ratio could increase back to the management's guidance level. Meanwhile, cash cost declined by 7%," Macquarie wrote in its research note published Sunday (May 4, 2025).

The foreign broker noted that AADI’s thermal coal ASP should have been stronger, as the company’s price drop exceeded the broader market’s benchmark.

Stock Recommendation and Price Target

Macquarie maintained its outperform rating on AADI stock, with a target price of Rp 9,000—well above the latest market price of Rp 6,725. The expectation of an interim dividend in H2-2025 is seen as a key catalyst.

Meanwhile, Sucor Sekuritas believes that the new coal royalty scheme will benefit holders of special mining business licenses (IUPK) such as AADI, PT Indika Energy Tbk (INDY), and PT Bumi Resources Tbk (BUMI), offering strong momentum toward their ambitious price targets.

Sucor continues to recommend a buy on AADI and INDY with aggressive target prices of Rp 30,100 and Rp 3,100 respectively. A 1% reduction in royalty is projected to lift net profit by 16% for INDY and 3% for AADI.