2Q26: Strong Pricing Cushions Softer Volumes

TINS reported 2Q26 revenue of IDR 4.96tn (-9.3% QoQ; +133.5% YoY), as higher ASP of c.USD 50,480/t (+2.6% QoQ) partly offset a 17.2% QoQ decline in sales volume, settled to 4,975 tons following a strong 1Q26. 6M26 revenue reached IDR 10.4tn (+146.9% YoY).

Profitability remained resilient, despite softer sales volume, with gross profit of IDR 1.95tn (-7.6% QoQ; +320.7% YoY) and gross margin expanding to 39.3% (+0.7ppt QoQ; +17.5ppt YoY), +581.8% YoY) and EBITDA totaled IDR 1.74tn (-14.8% QoQ; +315.1% YoY). Net profit came in at IDR 1.21tn (-19.1% QoQ; +562.6% YoY), while 6M26 net profit reached IDR 2.72tn (+804.7% YoY), reinforcing the conviction that earnings are tracking ahead of expectations.

The Sweet Spot: Capturing Higher Prices, Optimizing Lean Costs

Tin prices should remain resilient through FY26, as global inventories continue to tighten. LME tin inventories have declined to 5.6kt in Asia (from a peak of 8.3kt) and 6.0kt globally (from a peak of 9.0kt), reflecting sustained inventory drawdowns amid stronger consumption. The global tin supply-demand balance also remains supportive, with FY26 supply projected to grow only c.3.0%, lagging demand growth of >3.5% and keeping the market structurally tight. In 1H26, global tin recorded a c.5.7kt supply deficit, equivalent to c.3.3% of demand, following an already sizable c.18kt deficit in FY25. With demand growth continuing to outpace incremental supply, we expect the deficit to persist through FY26, providing further support for tin prices and TINS’ earnings outlook. We therefore expect tin prices to remain above USD 50k/t through year-end, raising a supportive pricing backdrop for TINS.

TINS remains well-positioned to benefit from elevated tin prices, through recovering sales volumes and resilient unit economics. Indonesia's Jun-26 tin exports rebounded to 3.2kt from 2.5kt in May-26 (Apr-25: 1.8kt), supporting our 24kt FY26 sales volume assumption. Alongside this volume recovery, TINS continues to enforce solid cost discipline, with cash cost below USD 25k/t, supported by stable fuel prices at IDR 13–17k/liter and raw material costs below 40% of revenue. We maintain our FY26 cash cost assumption at c.USD 24k/t, implying a healthy c.50% cash margin, given a USD 50k/t tin price. In addition, the delayed implementation of the proposed royalty increase from 10% to 20% removes a potential c.IDR 1.5tn earnings headwind, supporting our expectation for a net margin above 20% - potentially the highest level in the past decade.

BBRI - Not a Shiny Time

BBRI - Not a Shiny Time

Mardy Sutanto

26 July 2024 - 07.00am

BBRI - Not a Shiny Time

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