JAKARTA - PT Pemeringkat Efek Indonesia (Pefindo) has affirmed its idAA- ratings for PT AKR Corporindo Tbk (AKRA)'s Shelf-Registered Bonds I 2017 Shelf-Registered Bonds I 2012. Along with the rating for the bonds, the company also revised the outlook for AKRA from positive to stable.
As cited from the press release, Pefindo stated that the rating may be improved further if AKRA improves its capital structure, which indicated by debt to EBITDA ratio of less than 2.0x on a continuous basis, while maintaining effective cost management in its fuel distribution business and achieving its target of the sale of land in industrial estate.
In contrast, the rating will be lowered if AKRA aggressively taking debts to finance its expansion. This can weaken its capital structure and cash flow protection measures, without being compensated by stronger business performance and if its profit margin continues to decline, which will result in lower cash flow.
The rating reflects steady demand for fuel in Indonesia, AKRA's extensive logistic infrastructure network, and strong cash flow protection measures and liquidity. However, the rating is constrained by risk related to further industrial estate development and exposure to the downturn in the mining sector. (LK/AR)