United Tractors (UNTR IJ) - Good April 2011 operational result by Sarina Lesmina - CLSA

· Komatsu sales in April: 767units. Total 4M11: 2,974 units (+76% YoY). Also, 4M11 sales came at 42% of company's FY11 guidance of 7,000 units (+29% YoY). With expected 20-30% drop in next few months due to components and large equipments shortage, we have used 5,700 units. This might be too low now, especially if things recover in 4Q, as expected by Komatsu.

· Pama's coal production in April was 6.1m tonnes, down 7% MoM. However, strip ratio had improved to 9.9 in April. Total 4M11 production was 25.4m tonnes (+3% YoY), 31% of our FY11 expectation of 82m tonnes. Strip ratio for 4M11 was 9.0x. We expect 8.7x for FY expectation. (Due to bad weather, strip ratio was 8.4 in 2010). Appreciating Rp, however, might affect margin as seen in 1Q11.

· Coal sales from DEJ and TTA was 0.42m tonnes in Mar, up 13% MoM. Total 4M11 coal sales was 1.42m tonnes (+51% YoY), 31% of our FY11 expectation of 4.5m tonnes. The increase in production came from both DEJ and TTA.

Comment: While the strip ratio of 9.9 appears high, the projects are in Central Kalimantan where strip ratios are typically higher (BORN is about 11x).