PT AlamTri Resources Tbk (previously known as PT Adaro Energy Indonesia Tbk) is an Indonesian coal mining company, the country’s second-largest by production volume. In the 2023 Forbes Global 2000, Alamtri was ranked as the 1393th-largest public company in the world and now the sixth largest coal mining company in the world.
PT Alamtri Resources Indonesia Tbk is an integrated mining, energy, and minerals company. It operates through the following segments: Coal Mining and Trading, Mining Services, Logistics, and Others. The Coal Mining and Trading segment involves producing and distributing thermal coal. The Mining Services segment includes the exploration, drilling, transportation, logistical support, and overburden mining removal services. The Logistics segment focuses on coal barging and ship loading, fuel transport, channel, dredging, multipurpose terminal and stockpile management, stevedoring to dockyard operations.
IDX: ADRO
Important to Realize
PT AlamTri Resources Tbk is the holding company for the subsidiaries who are also listed on Indonesian markets. In this sense, they have created cells to break up the assets:
- PT Alamtri Minerals Indonesia Tbk (IDX: ADMR), the company engages in metallurgical coal mining. ADMR holds five coal mining concession agreements (PKP2B) located in East Kalimantan and Central Kalimantan.
- Holding a (Mkt cap 39.86T
- P/E ratio: 6.35 // Div yield 4.90%)
- PT Saptaindra Sejati (SIS), operates a mining services business. SIS is one of Indonesia’s largest mining contractors, offering various mining services, including mine planning and operations, mining equipment provision, construction work, equipment rental services, machinery repair services, and other mining-related services.
- PT Alamtri Renewables Indonesia company also operates in the renewable energy sector (unlisted)
In this way, any financing from the woke ESG banks can include the energy conglomerate without renewable misallocation of capital disturbing the reliably profitable coal industry.
Operations
ADRO is one of Indonesia’s leading metallurgical coal producer with low-cost, efficient operations. Their coal reserves: 173.0 Mt. Coal resources: 975.6 Mt–and they intend to reliably produce a sales between 5.6 and 6.1 Mt annually (providing them with ~28 years LOM).
Why the fall?
You may be wondering why there’s a pullback in their revenues as of late. Half of this had been planned; half had been of a cyclical nature. Several factors have contributed to this including a broader market downturn in Indonesia such as weak global coal prices, and negative sentiment towards the energy sector. Specifically, concerns about US trade policy, weak economic data, and potential impacts on Chinese coal import policies have negatively affected energy stocks like ADRO. I believe these are hiccups however that will ultimately lead to a re-rating of this company.
Ratios
IDR currency
| Mkt cap | 56.44T |
| P/E ratio | 3.23 |
| Div yield | 14.91% |
| Metric | ADRO |
|---|---|
| Price/Book Value | 0.71 |
| Price/Sales | 1.06 |
| Price/Cash Flow | 2.25 |
| 52-wk high | 4,300.00 |
| 52-wk low | 1,600.00 |
| Qtrly Div Amt | 68.40 |
Large contraction of balance sheet ($, millions)
| Item | FY24 vs. FY23 | Change |
| Total Assets | 6,702 vs. 10,473 | -36% |
| Total Liabilities | 1,331 vs 3,064 | -57% |
| Total Equity | 5,371 vs. 7,409 | -28% |
| Interest-Bearing Debts | 548 vs. 1,423 | -61% |
| Cash & Cash eq. | 1,406 vs. 3,311 | -58% |
| Net Debts | (1,486) vs. (1,936) | -23% |
| Free Cash Flow | 366 vs. 749 | -51% |
In doing this, they still hold a considerable amount of cash and negative net debt, but they’ve greatly reduced their total liabilities (less than cash holdings). This is due to their spin-off of one of their major holding company assets.
Following the spin-off, they are likely to position themselves for their upcoming growth capital expenditures of $475 million to $525 million… on what you may say?
Hydro Plants
They have a planned installed capacity of 1,375 MW, with the potential to generate approximately 9 Terawatt hours (TWh) per annum.
- Located in North Kalimantan, this power plant will provide affordable, reliable, and sustainable energy to support the Kaltara Industrial Park. Completion date is estimated to be 2030. Interestingly, they hope for their aluminum smelting plant to be solely fuelled by this hydro-power plant greatly improving their margins in the long-run.
- Will use the Concrete Faced Rockfill Dam (CFRD), designed with a dam crest height of 235m and crest length of 815m. This hydro power plant will
have one of the world’s tallest dams.
In this sense, ADRO is a growth energy play, that pays a dividend.
Returns
| Metric | ADRO |
|---|---|
| Return on Assets | 6.65% |
| Return on Equity | 9.45% |
| Return on Invested Capital | 6.50% |
Interestingly, due to lower coal prices they are growing in terms of both production and sales; but this has not translating into generating more revenues and net earnings compared to FY23 (down 2-3%).
| Profit Margin | 54.97% |
| Operating Margin (ttm) | 20.94% |
Explanation
The sale of AADI resulted in ADRO no longer consolidating AADI’s financial statements. Additionally, as mentioned above, lower metallurgical coal prices influenced by a slowdown in China’s property have contributed to the pull back. The long-term takeaway here is their ability to operate profitably.
Dividends
PT Alamtri Resources Indonesia Tbk (ADRO) will distribute a cash dividend of $300 million or approximately Rp4.89 trillion (at an exchange rate of Rp16,308) from the net income of the 2024 fiscal year. This decision has been approved at the General Meeting of Shareholders of AlamTri on June 2, 2025.
This dividend alone amounts to about 10% of the current market cap of the company
| 5 Year Average Dividend Yield | 11.84 |
I would expect that dividends are going to fall given a reduced payout ratio and less funds to pay them after their restructuring; but that they will resume in a strong way.
Year Profit of ADRO Parent Dividends Per Share Payout
They have paid a dividend every year since 2008–average payout ratio from profits ranges year to year but averages about 48% (which is why the dividends will continue for us).
Asian Diversification
Unlike some other stocks that may split their customer base; Adaro has de-risked their clients from significant global tariff and shipping constraints by focusing on mostly Asian markets. Notice how they’re fuelling both Japan and China for their steel production.
Information
The sale from their shareholding of $AADI had created a massive reduction in balance sheet activity–but now they are gearing up for the next stage of growth fuelled by their coking coal sales. Right now their revenues come from their holding in $ADMR (coking coal production + coal reserves) (83% ownership) and SIS (mining contractor; 100% ownership).
From Farras Farhan’s Samuel Indonesia report:
+
- Their average strip ratio is around 3.9 (on the lower end of averages for Indonesian coal miners)
- Sales volumes have been increasing ~26% every year since 2021.
- They have 588 solar panels in place (paid for) to produce 156,000 kWh/year & serves a captive market to support the mining operation of PT Adaro Indonesia. They estimate to save 33,000 litres of diesel per year from these.
Things I like
- Actively investing cash reserves in Met Coal & their aluminum smelter facility (aiming for 1.5Mt a year).
- Their able to maintain a positive profile of profitability with their current portfolio; they’re not saying bye-bye to coal, they’re merely adding hydropower to their mix.
- Strong demand from blue-chip steel companies with current customers located in Japan, South Korea, China, Indonesia
- Considerable Dividends for shareholders & a proven desire to payout to shareholders–who are the shareholders? Closely held shares= 18.59 B‬‬ (62.3%)// Free Float shares =11.25 B‬‬ (37.7%).
- Met coal often selling at a premium to thermal coal due to tighter supply dynamics; demand remaining strong for the long-run.
- The upside in price as they bounce back! See below:
Napkin Math
If we look at the ownership of their assets–> We see they have a 83.84% ownership of ADMR still (2,937M of which they hold 2,462M) + their total JVs of 39.3% (625M of which they hold 245M)
+ the Remaining Assets after their AADI Spinoff of 39.3% their value (4,557M of which they hold 1,790M)
So, 2,462+245+1,790= 4497M –> applying a 10% holding company discount we have, 4,042M USD in net value. But also we need to factor in that they have a net debt of (1,486)–> Bringing the total net asset value of their holdings to 5.528B USD
In IDR (using a conversion rate of: 16300IDR per USD) we have 90,126,853,600,000 IDR Of net asset value
90,126,853,600,000 / 29,830,000,000 shares = 3021/share
At the time of writing, shares are going for 1870–> We’re looking at a 61.5% upside in value alone (assuming no further margin increase on coal prices and no dividends)
News
The most latest bit of news is truly significant. This buyback program amounts to a maximum of up to the 7% of their entire marketcap. In USD value it amounts to $245,185,927.00. Anymore evidence that they are undervalued?
–MSCI Global Standard has made amendments to their portfolio by deleting $ADRO from this portfolio and adding it to the MSCI Small Caps (people are not shopping for it right now either)
Big Picture
Coal use is not going away as many have promised it would. Instead, coal consumption is only increasing, especially in Asian markets. Coal is the item that everybody loves to hate, but we cannot continue without it.
ADRO is forecasting a healthy balance of supply and demand for their operations (in fact, seeing their demand from Asia-Pacific, it’s been quite flat despite the Met Coal commodity price falls). The long-term outlook shows a positive and stable growth in demand, which positions Indonesia for sustained growth in both domestic and international markets. Their assessment is as follows:
- China continues to be the main steel producer, although India’s steel production capacity is expected to surpass China’s starting in 2030.
- India’s implementation of import restrictions on metallurgical coke signals a shift in trade dynamics, with expectations of a significant increase in metallurgical coal imports. India remains a key driver of metallurgical coal demand, with major steelmakers—including Tata Steel, JSW, JSPL, and ArcelorMittal Nippon Steel (AMNS)—pursuing ambitious blast
furnace expansions that require met coal to function.
On the Supply Side: - Australia continues to be the main supplier in the seaborne market, but supply growth is expected to face limitations, with periodic mine closures impacting availability later in the decade. Their ESG and other green environment laws greatly inhibits the exploration and advancement of existing properties that otherwise would make Australia a primary market player
- Russian supply is expected to remain constrained due to logistical challenges and geopolitical sanctions.
Indonesia has a unique role since they are proximal to their customer base but they are also relatively politically neutral.
Closing
I believe that Indonesia holds a number of interesting companies that have a mix of high dividends, low debt and a strong shareholder base–that are actively growing and deploying capital. Are there still bargains in Western markets–sure, but the uncertainties are mounting and value stocks that were super cheap even a year ago are going for ordinary prices now as the hot money from the Fed printers is shuffled around.
With a geopolitically neutral position, dividend record, stable demand [relative to supply], and a strategy to fund their hydroplant using coal revenues + (perhaps most importantly) a discount to their net assets; I believe that PT Alamtri Resources Indonesia Tbk ($ADRO) is a buy position that fits into most portfolios!
What do you think? Are you anti-coal? Anti-Asia? Let me know by clicking the button below.
In the meantime,
