Cita Mineral's H1 profit falls 62% as alumina JV earnings overshadow revenue growth

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PT Cita Mineral Investindo Tbk recorded a strong rise in revenue during the first half of 2026, but the higher sales did not translate into stronger earnings. Instead, the Indonesian bauxite miner reported a sharp fall in profit as weaker returns from its alumina refining investment outweighed improvements in its core mining business. The results underline how the company's earnings are becoming increasingly dependent on its downstream aluminium investments.

According to the company's unaudited consolidated financial statements for the six months ended June 30, 2026, net sales increased 36.9 per cent year on year to IDR 1.91 trillion (USD 106.1 million) from IDR 1.39 trillion (USD 77.2 million). Gross profit also edged higher to IDR 612.4 billion (USD 34 million) from IDR 595.1 billion (USD 33.1 million).

Despite the stronger revenue, net income attributable to shareholders dropped 62.1 per cent to IDR 625.8 billion (USD 34.8 million) from IDR 1.65 trillion (USD 91.7 million) in the same period last year. Earnings per share also declined to IDR 158 from IDR 417.

Downstream investment weighs on earnings

The biggest reason behind the profit decline was Cita Mineral's 12.5 per cent stake in PT Well Harvest Winning Alumina Refinery (WHWAR), its alumina refining joint venture with China Hongqiao Group and Winning Investment (HK). Because the company records its share of WHWAR's profit using the equity method, any change in the refinery's performance has a direct impact on Cita Mineral's earnings.

During the first six months of 2026, Cita Mineral's share of WHWAR's earnings fell to IDR 275.5 billion (USD 15.3 million) from IDR 1.34 trillion (USD 74.4 million) a year earlier. The decline of nearly IDR 1.06 trillion (USD 58.9 million) was the main reason behind the company's weaker bottom line.

Some parts of the business, however, showed improvement. The company recorded a net foreign exchange gain of IDR 86.8 billion (USD 4.8 million), compared with a IDR 0.9 billion (USD 0.05 million) loss a year ago, mainly due to movements in the Indonesian Rupiah against WHWAR's US dollar functional currency.

These gains were partly offset by lower interest income, which declined to IDR 29.7 billion (USD 1.7 million) from IDR 43.1 billion (USD 2.4 million). Selling expenses also rose to IDR 166.4 billion (USD 9.2 million) from IDR 104.6 billion (USD 5.8 million), while general and administrative expenses increased to IDR 92.1 billion (USD 5.1 million) from IDR 74.5 billion (USD 4.1 million) as business activity expanded.

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Dividend payout reduces cash reserves

As of June 30, 2026, total assets stood at IDR 8.54 trillion (USD 474.4 million), down from IDR 9.13 trillion (USD 507.2 million) at the end of 2025. Total equity also declined to IDR 8.10 trillion (USD 450 million) from IDR 8.77 trillion (USD 487.2 million).

Cash and bank balances fell sharply to IDR 795.4 billion (USD 44.2 million) from IDR 1.42 trillion (USD 78.9 million), mainly because the company paid a cash dividend of IDR 1.39 trillion (USD 77.2 million) in June 2026, equal to IDR 351 per share. The payout, approved at the company's Annual General Meeting in May, was higher than last year's dividend of IDR 328 per share.

Despite the lower cash balance, Cita Mineral generated stronger cash from its operations. Net cash from operating activities increased to IDR 428.0 billion (USD 23.8 million) from IDR 321.6 billion (USD 17.9 million), supported by higher cash receipts from customers.

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Growing exposure to the aluminium value chain

While Cita Mineral's core business remains bauxite mining through PT Harita Prima Abadi Mineral and other subsidiaries in West Kalimantan's Ketapang region, a growing share of its assets is now tied to downstream aluminium projects.

Its investment in WHWAR was valued at IDR 1.64 trillion (USD 91.1 million) as of June 30, 2026, after the company injected an additional IDR 99.1 billion (USD 5.5 million) in April to maintain its 12.5 per cent ownership. It also holds a separate advance for investment of USD 15 million (IDR 184.2 billion). During the first half, dividends received from WHWAR declined to IDR 419.5 billion (USD 23.3 million) from IDR 595.0 billion (USD 33.1 million) a year earlier.

Cita Mineral also owns a 16.00 per cent stake in PT Kalimantan Aluminium Industry (KAI), an aluminium smelter project. The investment was valued at IDR 927.0 billion (USD 51.5 million) and has been built through several rounds of funding, beginning with an initial IDR 330.6 billion (USD 18.4 million) investment in December 2022, followed by IDR 177.3 billion (USD 9.9 million) in November 2024 and another IDR 419.1 billion (USD 23.3 million) between June and August 2025.

The company also holds a 16.00 per cent interest in PT Kaltara Power Indonesia (KPI), which is expected to supply power for downstream aluminium processing. The investment increased to IDR 711.9 billion (USD 39.6 million) from IDR 612.8 billion (USD 34 million) after another IDR 99.1 billion (USD 5.5 million) capital injection in April 2026.

Together, WHWAR, KAI and KPI were valued at approximately IDR 3.28 trillion (USD 182.2 million) as of June 30, 2026, representing nearly 40 per cent of Cita Mineral's total assets. The company's dependence on its downstream operations is also evident in its sales, with about 77 per cent of first-half revenue coming from related-party WHWAR.

The first-half results showed that while Cita Mineral's mining business continued to generate stronger sales and cash flow, the performance of its downstream investments now plays a much larger role in determining overall profitability. Investors will therefore be watching closely to see whether WHWAR's earnings recover in the second half and how the KAI smelter and KPI power projects contribute once they become operational.