KEY HIGHLIGHTS
- Start with the base, because it explains almost the whole print. The 1H25 G&A note carries a licence charge of IDR 400 Bn that is absent in 1H26, and the 1Q25 note shows no such item, so the entire charge fell in 2Q25. The accruals note corroborates the timing: no licence accrual at 31 March 2025, IDR 400 Bn at 30 June 2025. Adjusting for it, 2Q26 operating profit fell 11.5% YoY rather than rising 51.9%, pre-tax profit fell 3.7% rather than rising 58.5%, and net profit was roughly flat at +0.9% rather than up 70.7%. We stop short of calling it a clean one-off: AALI also carries a provision for administrative fines tied to forestry spatial-planning rules of IDR 234 Bn at 30 June 2026 against IDR 221 Bn at end-2025, so this looks like the first instalment of a running compliance cost.
- Underneath, the operating picture is steady rather than strong. 2Q26 revenue rose 4.5% YoY to IDR 7,757 Bn and 1H26 5.6% to IDR 15,259 Bn, with gross margin essentially flat YoY at 17.6%, though the 1H26 margin of 16.6% is 1.0pp above 1H25. Growth is regional: Kalimantan revenue rose 18.3% YoY and its gross profit 51.1%, while Sumatera was flat at +0.7% and its 1H26 revenue fell 0.9%. CPO and derivatives rose 6.4%; palm kernel fell 6.8%.
- Costs are running hard once the one-off is removed. On a like-for-like basis 2Q26 G&A rose 61.9% YoY to IDR 365 Bn against IDR 225 Bn, with professional fees more than doubling to IDR 147 Bn in 1H26 from IDR 64 Bn. Selling expense rose 21.7%. Below the line the comparison also flattered: finance cost fell to IDR 2 Bn from IDR 98 Bn in 1H26, though interest income halved and joint venture losses widened to IDR 82 Bn.
- The consensus comparison looks generous because the estimates are stale. 1H26 revenue is 53.9% of the FY26 forecast and net profit 67.8%, but FY26 consensus revenue of IDR 28,314 Bn sits below the FY25 actual of IDR 28,655 Bn and implies 2H26 revenue falling 8.1% YoY, which the first half gives no sign of. Consensus also assumes gross margin compressing to 14.8% against the 16.6% delivered. Key watch: whether Kalimantan momentum holds, and whether the step-up in professional fees and G&A is structural.
Regards, Aldiracita Research
