JAKARTA. Fitch Ratings has revised the Long Term National Ranking of PT Golden Energy Mines Tbk (GEMS) from Positive to A(idn) with a Stable outlook.
According to Fitch, the outlook was revised due to lower profit potential of the Sinarmas Group member. Previously, Fitch had also lowered the assumed Newcastle coal price from US$ 79 to US$ 77 this year, while for 2020 the assumed price is set from US$ 78 to US$ 73 per tonne.
"GEMS's EBITDA scale will be lower than previously estimated based on Fitch's assumed long-term coal prices," said Fitch analyst Shubha Sethi in her report. "This is despite the company's plan to increase production volume."
Fitch predicts that GEMS's EBITDA per tonne will be around US$ 4 from 2019 to 2022, lower than the fiscal year of US$ 6.8 per tonne.
Fitch acknowledges that the decline is in line with the slowing performance of coal issuers. "For GEMS, the impact on its cash flow is partly mitigated by our expectations regarding volume growth," said Ms Sethi.
Previously the Indonesia Stock Exchange announced a plan to delist GEMS's stock, having suspended the stock for 21 months. GEMS's suspension will have lasted for 24 months in January 30, 2020. During the suspension, GEMS has not shown any indication of performance improvement to the IDX and shareholders. (KR/MS)