Chapter 2

The cash that actually arrives

Saratoga's reported earnings are almost entirely fair-value marks. The cash that reaches the holding company is dividends from investees, and in 2025 that stream, net of every holding-company cost, came to Rp2,294 billion — 9.6% of the Rp23,874 billion market capitalisation. Four-fifths of it came from two coal companies that together are 28% of the portfolio's value. This chapter separates the two flows and sets out what the single covering forecast says.

The audited cash flow statement is the cleanest window into the business. It shows six line items that recur every year — dividends collected, interest collected, interest paid, staff paid, tax paid, other operating payments — and two that are discretionary: proceeds from selling investments, and cash deployed into new ones. Stripping the discretionary items out gives a recurring cash result that ties exactly to the reported operating cash flow.

Source: audited consolidated statements of cash flows, years ended 31 December 2025 and 2024 [1]; subtotals derived.

Rp2,294 billion of recurring cash income in 2025 is Rp169 per share against the 27 July 2026 close of Rp1,760 — a 9.6% cash yield on the market price, and 3.8% on the Rp60,284 billion net asset value the company publishes [2]. On the 2024 base of Rp3,959 billion the same arithmetic gives Rp292 per share and 16.6%. The two years bracket the range, and the difference between them is almost entirely one variable: how much coal paid out.

The holding company's own cost base barely moves. Staff payments ran Rp117 billion in 2024 and Rp118 billion in 2025 [3]; accrual operating expenses were Rp233 billion against an internal target of Rp267 billion, or 0.39% of net asset value [4]. Interest paid was Rp177 billion in 2025 and will fall: borrowings were Rp1,450 billion at year-end and Rp796 billion at 31 March 2026, against Rp871 billion of cash and Rp156 billion of time deposits [5].

Across five years the gross flows tell the same story with more amplitude.

Sources: FY2021 Annual Report, Consolidated Statements of Cash Flow [6]; FY2022 [7]; FY2023 [8]; FY2024 [9]; FY2025 [10].

2022 is the outlier that matters for calibration: Rp20,200 billion of disposal proceeds and Rp18,290 billion redeployed in the same year [11]. Much of that was a restructuring of the Tower Bersama holding, in which shares were sold to Bersama Digital Infrastructure Asia while a group company subscribed for Bersama Digital shares, taking effective ownership of Tower Bersama from 34.23% to 31.26% [12]. Gross proceeds at this company are not evidence of monetisation on their own; the redeployment line has to be read alongside them.

Reported profit is a mark, not a receipt

The income statement runs on a different engine. Over five years the fair-value line swings from a Rp24,408 billion gain to a Rp13,811 billion loss and back to a Rp4,140 billion gain, while dividend and interest income never leaves a band of Rp1,656 billion to Rp3,849 billion.

Sources (Rp billion): FY2022 Annual Report, Review of Operations [13]; FY2023 [14]; FY2024 [15]; FY2025 [16].

The tax line moves with the marks too. Deferred tax was a Rp1,615 billion charge in 2024 and a Rp749 billion credit in 2025 [17], against cash income tax actually paid of Rp5 billion and Rp26 billion [18]. Three lines of the profit and loss account — the fair-value gain, the deferred tax, and therefore the bottom line — are opinions about prices rather than transactions.

The first quarter of 2026 is the cleanest single illustration. Reported profit was Rp5,321 billion, or Rp393 per share, on a Rp6,911 billion fair-value gain and a Rp1,500 billion deferred tax charge; dividend and interest income recognised in the quarter was Rp6 billion [19]. The cash statement for the same three months shows Rp705 billion of dividends actually collected and Rp97 billion deployed [20]; the related-party receivable fell from Rp731 billion to Rp27 billion over the quarter [21], a balance the company attributes largely to dividends receivable from Alamtri Resources [22]. Dividend income is recognised on declaration, and declarations cluster in the second and third quarters, so a single quarter's income statement says almost nothing about the year's cash.

Sources: profit from the Review of Operations tables, FY2022 and FY2025 Annual Reports [23], [24]; cash dividend receipts from the cash flow discussions [25], [26].

Where the value sits and where the income comes from

The dividend income breakdown is disclosed by investee every year, and for anyone holding the shares for the cash it is the most consequential table in the annual report.

Sources: dividend income breakdown tables, FY2022 Annual Report [27], FY2024 [28], FY2025 [29]; coal is Adaro Energy Indonesia, renamed Alamtri Resources Indonesia, plus Adaro Andalan Indonesia from 2025.

Coal's share of dividend income has been 67%, 74%, 77%, 82% and 79% in the five years to 2025 [30], [31], [32]. It has never been below two-thirds. The 2025 fall in total dividend income, from Rp3,786 billion to Rp2,705 billion, was Alamtri cutting from Rp3,121 billion to Rp1,515 billion, partly offset by Rp634 billion of first-time dividends from Adaro Andalan after the thermal coal separation [33].

Set that against where the portfolio value actually sits at 31 December 2025.

Source: derived from the net asset valuation table and the dividend income breakdown, FY2025 Annual Report [34], [35].

The two largest holdings by value — Tower Bersama at Rp18,663 billion and Merdeka Copper Gold at Rp10,806 billion, together 48% of the Rp60,768 billion portfolio [36] — supplied 8% of dividend income between them, Merdeka none at all [37]. The two coal companies, 28% of value, supplied 79%. The discount is a claim on towers and copper; the yield is a claim on coal. One share certificate delivers both, but they are not the same asset and they will not decline or recover together.

That divergence also explains why the mark and the cash moved in opposite directions in 2025. Tower Bersama and Merdeka added Rp3,399 billion and Rp3,284 billion of fair-value gains while Alamtri and Adaro Andalan subtracted Rp4,600 billion [38] — net asset value per share rose 12% to Rp4,444 [39] in the same year cash dividend receipts fell 41% [40].

Debt first, dividend last

What Saratoga does with the cash has followed a consistent order of priority, and the dividend has come last in it. The record of distributions, by the year each was paid:

Sources: dividend tables, FY2022 Annual Report [41], FY2023 [42], FY2025 [43]; the 2026 amount from Indonesian press coverage of the May 2026 general meeting [44]. The 2021 payment of Rp110 per share is shown adjusted for the five-for-one split.

The Rp103.3 paid in June 2026 is the largest per-share amount in the company's listed history, but it is the second time in four years the company has distributed roughly Rp1 trillion: Rp1,017 billion, or Rp75 per share, went out in June 2023 [45]. What followed is the more instructive part: distributions fell to Rp298 billion and then Rp199.9 billion [46] across 2024 and 2025 — the two years in which the company deployed Rp5,772 billion into new investments [47] and drew Rp3,533 billion of bank loans to help fund it [48]. In 2025 the priority reversed: Rp4,686 billion of loans were repaid against Rp2,931 billion drawn and deployment halved [49], leaving borrowings at Rp1,450 billion and loan-to-value at 0.8% [50]. The large dividend arrived only once the balance sheet was clean.

There is no formula behind any of this, and the company says so. Its stated policy is that dividends require sufficient profit or positive retained earnings and are subject to the board's recommendation and shareholder approval, with no payout ratio specified [51]. The meeting that approved the 2026 payment framed it as 19.13% of FY2025 net profit of Rp7.32 trillion [52] — a percentage of a number that was itself 57% fair-value gain on investments [53]. The same ratio applied to the 2023 loss year would have produced nothing.

My read is that the dividend at Saratoga is a residual rather than a claim: it is what remains after management has decided how much to invest and how much debt to carry, and those two decisions come first. The strongest fact against that reading is the 2026 sequence itself — the payment was raised sevenfold in a year when dividend receipts fell 41%, which is a deliberate step up rather than residual behaviour. A second year would settle it: a payment near Rp100 per share for FY2026 alongside continued deployment would establish a policy where none is written down.

Forward estimates, and how thin they are

Management publishes no forward financial guidance. The FY2025 annual report states that as an investment holding company it does not set quantitative targets for investment deployment, realised gains or net profit, and the section headed "Target for 2026" says the company sets formal annual targets only for operating expenses [54], [55]. There are no earnings calls and no transcripts in any period, so there is no management commentary to model against either.

That leaves a single sell-side model. The figures below are the consensus as compiled for this report, with one contributing estimate on earnings and dividends.

Source: consensus estimates as compiled for this report; one contributing analyst on earnings and dividends. The 2025 row is the estimate, not the reported outcome.

Two things are worth extracting from it, and one warning.

The model strips fair value out entirely. Its forecast operating result is roughly minus Rp250 billion to minus Rp300 billion a year — the holding company's cost base and nothing else — with dividends carried below that line. The widely quoted "EPS growth" figures for Saratoga therefore compare a normalised forecast against a mark-inclusive actual: the 2025 estimate of Rp66.3 sits against reported basic earnings of Rp540 per share [56], and the resulting "decline" for 2026 is an artefact of the two bases, not a forecast of deterioration.

On its own terms, the model puts normalised earnings at Rp148.3 per share for 2026 and Rp194.5 for 2027. At Rp1,760 that is 11.9 times 2026 and 9.0 times 2027. The dividend line reads Rp103.5 for 2026 — within rounding of the Rp103.3 already paid in June — then Rp77.4 for 2027, a 25% reduction. Whether that reflects a view on sustainability or simply a payment-year convention cannot be determined from the data available; either way, the one house modelling this stock does not carry Rp103 forward as a run rate. The mean twelve-month price target is Rp2,850, and one covering broker cut its target to Rp2,600 from Rp3,000 in July 2025.

The warning is reconciliation. The model's 2025 normalised net income of Rp898 billion is well below the Rp2,294 billion of recurring cash the audited cash flow statement shows [57]. Whatever normalisation produces that gap is not disclosed, and with a single contributor there is no second model to triangulate against. These estimates are one house's view and should be read as such rather than as a market consensus.

The more useful forward number comes from management by way of the press: a target of US$100–150 million of new investment a year, in healthcare, renewables, digital infrastructure and consumer [58]. At the year-end 2025 rate of Rp16,782 to the dollar [59] that is Rp1,678 billion to Rp2,517 billion. Placed against the FY2025 recurring cash base of Rp2,294 billion, the deployment target alone absorbs 73% to 110% of it, and the Rp1,401 billion dividend absorbs a further 61%. Together they claim 134% to 171% of recurring cash income.

That is not a solvency observation. With Rp796 billion of borrowings against Rp1,027 billion of cash and deposits at 31 March 2026 [60] and a Rp60 trillion portfolio behind it, the company has ample capacity to borrow or sell. It is an observation about which of the three uses gets cut when coal dividends fall, and the 2024 and 2025 record answers it: the dividend did.

What would change the read

Three developments would move this analysis materially, and each is observable within a year. Alamtri and Adaro Andalan declaring 2026 dividends at or above 2025 levels would confirm the cash base at roughly Rp2.3 trillion; the sensitivity is straightforward, since every Rp500 billion of lost coal dividends is 22% of that base and Rp37 per share. Tower Bersama or Merdeka Copper Gold initiating a meaningful distribution would begin to close the gap between where the value sits and where the income comes from, and would be the most valuable single change to the cash profile. And a written payout policy — a stated share of dividends received rather than a percentage of a mark-to-market profit — would convert the largest per-share dividend in the company's history from an event into a claim, which is the difference between a 5.9% yield that can be underwritten and one that cannot.

Web research was unavailable throughout this run, so no broker note, investee dividend announcement or post-March-2026 disclosure could be checked beyond what the corpus and the compiled estimate data contain. The composition of the portfolio itself is treated in Portfolio and Discount; what this chapter adds is that the cash and the value inside it are carried by different assets.