ID_ADRO: H1 profit up 68.9% while operating cash flow turned negative

The H1 2026 report showed revenue of USD 999.242 million and net profit of USD 329.195 million. Net margin rose to 32.9% from 22.7% a year earlier, while operating cash flow turned negative at minus USD 42.917 million. The stock trades at P/E LTM 6.95 and EV/EBITDA LTM 5.33, and the portal's model puts upside to fair value at +28%. With strong profit and a 9.87% dividend yield, the share looks attractive, but the negative cash flow needs explaining.

Key takeaways

— H1 revenue rose 16.5% to USD 999.242 million, but Q2 growth slowed to 23.4%

— H1 net profit jumped 68.9% to USD 329.195 million, lifting net margin to 32.9%

— H1 operating cash flow turned negative at minus USD 42.917 million, though LTM operating cash flow was USD 594.1 million

— Net debt is negative at minus USD 222.859 million, with net debt/EBITDA LTM at -0.29

— Trailing 12-month dividend yield is 9.87%, above the key rate and historical levels

— P/E LTM 6.95 and EV/EBITDA LTM 5.33 are below three-year averages

— The portal's model puts upside to fair value at +28%

Attractiveness

Key figures, USD bn

H1 revenue rose 16.5% to USD 999.242 million, but Q2 growth slowed to 23.4%

H1 2026 revenue reached USD 999.242 million, up 16.5% year-on-year. The growth was driven by higher sales volumes and favourable pricing in key markets.

In Q2 2026, revenue was USD 470.905 million, up 23.4% year-on-year. However, compared to Q1 2026, when revenue was also USD 470.905 million, quarter-on-quarter growth was flat.

LTM revenue stood at USD 2,000.0 million, confirming the business's scale. The slowdown in quarterly dynamics may reflect the high base of Q2 2025, when revenue was USD 381.619 million.

H1 net profit jumped 68.9% to USD 329.195 million, lifting net margin to 32.9%

H1 2026 net profit reached USD 329.195 million, up 68.9% year-on-year. Net margin rose to 32.9% from 22.7% a year earlier.

Such profit growth on revenue growth of only 16.5% points to significant operating efficiency gains or one-off factors. The report does not disclose the profit structure, so it is impossible to say precisely how much of the growth came from core operations versus other income.

LTM net profit was USD 624.1 million, meaning the half-year result accounted for roughly half of the annual figure, indicating stable profit generation.

H1 operating cash flow turned negative at minus USD 42.917 million, though LTM operating cash flow was USD 594.1 million

H1 2026 operating cash flow was negative at minus USD 42.917 million, a sharp contrast to the positive LTM figure of USD 594.1 million.

Negative operating cash flow alongside positive net profit typically signals working capital build-up, higher receivables, or seasonal factors. The report does not detail the causes, so we can only note the fact: profit was earned, but cash from operations did not follow.

For investors, this is an important signal. If the negative flow is one-off, it should reverse next period. If it reflects deteriorating payment discipline or inventory build-up, it could become a problem for dividend payments.

Net debt is negative at minus USD 222.859 million, with net debt/EBITDA LTM at -0.29

Net debt at the latest reporting date is negative at minus USD 222.859 million, meaning cash and equivalents exceed debt obligations.

The net debt/EBITDA LTM ratio is -0.29, confirming a net cash position rather than leverage. This provides a cushion and the ability to fund investments or dividends without borrowing.

Net debt changed by +RUB 0.1 billion versus the previous reporting date and by +RUB 0.7 billion over 12 months. The absolute increase does not change the picture: the company remains in a net cash position.

Trailing 12-month dividend yield is 9.87%, above the key rate and historical levels

The trailing 12-month dividend yield is 9.87%, a high level that exceeds the key rate and average yields in previous years.

The company pays dividends from net profit. H1 2026 net profit was USD 329.195 million, providing a base for payments. However, negative operating cash flow could limit the ability to pay dividends without drawing on cash reserves.

Our estimate for the current year's dividend assumes the payout ratio remains at historical levels and profit is close to the half-year figure. If second-half profit is lower, the payout could be smaller. The key risk is further deterioration in cash flow.

P/E LTM 6.95 and EV/EBITDA LTM 5.33 are below three-year averages

The stock trades at P/E LTM 6.95 and EV/EBITDA LTM 5.33, below three-year averages, indicating undervaluation relative to its own history.

Market capitalisation is USD 4,337.865 million. With LTM net profit of USD 624.1 million and LTM EBITDA of USD 771.8 million, current multiples look modest for a company with net cash and high profitability.

According to the portal's model, which re-prices EBITDA at current commodity prices and a target EV/EBITDA, upside to fair value is +28%. This is our own estimate, not a market consensus.

The portal's model puts upside to fair value at +28%

Our model estimates upside to fair value at +28%, based on re-pricing EBITDA at current commodity prices and a target EV/EBITDA multiple we consider justified given the company's cash position and profitability.

This estimate is sensitive to key commodity prices and the sustainability of operating cash flow. If the negative H1 cash flow proves one-off, the model should hold. If working capital issues persist, fair value could be lower.

The stock is held in our live model strategies ID Commodity-Upside and ID FVC (quality). This is a fact, not an argument for the verdict: each strategy screens for its own criteria.

Valuation on the latest reported figures

Bottom line

The H1 2026 report showed strong profit and rising margins, but operating cash flow turned negative. A net cash position and low multiples make the stock attractive, and a dividend yield near 10% supports investor interest. However, without an explanation for the negative cash flow, the sustainability of dividends and fair value remain in question. Verdict: attractive, but with a caveat – the key is cash flow recovery in H2.