GREEN ENERGY TRANSITION: VALUATION & STRATEGY FOR CORPORATE IMAGE ENHANCEMENT IN PT ADARO ENERGY TBK

• Main Author: Kevas Lemuel, Sereno
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/74600
• Institution: Institut Teknologi Bandung

This study aimed to analyse the impact of renewable energy transition on the corporate image and provides overall valuation of PT Adaro Energy Tbk, one of Indonesia's leading energy companies. The purpose was to comprehend the role of green energy initiatives in shaping a company’s non-financial value, its implications for corporate reputation and social responsibility, and to evaluate PT Adaro’s financial health independent of the direct financial implications of green energy transition. In terms of methodology, the research utilized an in-depth financial analysis technique involving the Free Cash Flow to Firm method, Price-to-Earnings Ratio, and EV/EBITDA for relative valuation. These techniques were applied in conjunction with expert perspectives and relevant sustainable business practice theories to provide comprehensive insights. The findings indicate that the transition towards renewable energy can significantly enhance PT Adaro's non-financial value. This shift also bolstered the company's corporate image, underlining its commitment to sustainability and social responsibility. From a financial perspective, despite strong fundamentals, PT Adaro appears undervalued compared to intrinsic and relative valuations, presenting an opportunity for potential investors. These findings hold crucial theoretical, practical, and managerial implications. They underscore the strategic value of renewable energy transition, not only in terms of sustainability and environmental responsibility but also in enhancing corporate image and financial attractiveness. Recommendations for PT Adaro include effectively communicating its true value to potential investors, improving operational efficiency, and bolstering transparency in its business practices. To improve solvency and financial stability, a strategic debt restructuring, and reduction plan is also suggested. Despite these findings, the study has its limitations, primarily the reliance on publicly available data and the exclusion of certain variables due to the complex nature of the renewable energy sector. Future research should aim to overcome these limitations by incorporating a more diverse range of variables and utilizing more extensive data collection techniques.