AKR Corporindo ($AKRA) has just released its financial statements which show a net profit of 565 billion rupiah in the first quarter of 2025. Unfortunately, this figure decreased by -5% YoY and -25% QoQ. This profit is equivalent to 23% of the 2025F consensus estimate and approximately 22%-24% of management’s guidance for 2025. Even though there will be no land sales at JIIPE this quarter, management is optimistic about the potential for land sales in 1H25 which is expected to range from 20-45 hectares.

Performance Points to Consider

1. PBT Trade and Distribution Segment Grows +16% YoY

Profit before tax from this segment, which accounts for 65%-75% of total GDP, experienced a significant recovery, growing 16% YoY during 1Q25. Gross profit from this segment also increased by 17% YoY, even exceeding the guidance set by management which only targeted +5%-7% YoY. This increase in performance was greatly influenced by the low-base effect of 1Q24 due to RKAB permit issues on customers in the mining segment. Going forward, AKRA management remains optimistic that it will maintain its gross profit guidance for this segment at +5%-7% YoY in 2025, despite the potential for a decline in fuel demand volume due to weakening commodity prices.

2. JIIPE Land Sales Not Available in 1Q25, but Estimated to Reach 20-45 Ha in 2Q25

Although there was no land sale in JIIPE this quarter, AKRA management underlined that there was a sale of 20 hectares of land in 2Q25 to Golden Elephant. This sales is already higher than the realization of 1H24 which was only 18.1 hectares. Management also predicts that there will still be additional sales of around 20-25 hectares in 2Q25. If all of this is realized, the potential for JIIPE land sales in 1H25 can reach 40-45 hectares, equivalent to 40-45% of the annual target at the level of 100 hectares.

3. 2024 Final Dividend Worth IDR 50 per share, Yield Indication of 4.2%

AKRA management also proposes a dividend distribution of 1.97 trillion rupiah or 88% of the dividend payout ratio in the GMS which will be held on April 28, 2025. This amount implies a final dividend of 50 rupiah per share with an indication of a dividend yield of 4.2% as of Friday (25/4). Previously, AKRA had also distributed an interim dividend of 50 rupiah per share in August 2024.

Key Takeaway

Although AKRA’s net profit is only equivalent to 23% of the consensus 2025F estimate and 22%-24% of management guidance, we assess their performance in 1Q25 to be relatively in line with expectations. This is supported by the shift in seasonality ahead of Eid and the projected sales of industrial land which are expected to increase in the following quarters. With global economic uncertainty still high and commodity prices low, we still believe that AKRA can achieve its 2025 guidance, considering that 1) the guidance is quite conservative compared to the realization of 2024; and 2) AKRA has a backlog of land sales contracts that have not been realized in 2024.