JAKARTA. Moody's Investor Service stated that the leverage matrix of mining companies in Indonesia will suffer the most compared to other companies in the Asia Pacific, due to the impact of the pandemic and volatility in commodity prices.
Matthew Moore, Vice President and Senior Credit Officer of Moody's, said that the commodity profile and regional differences will cause the decline in credit quality of mining companies. "Companies who rely on thermal and metallurgical coal will be the most affected," said Moore in his research report.
Meanwhile, Maisam Hasnain, Assistant Vice President and Analyst at Moody's, said that the leverage matrix for mining companies from Indonesia was weakening due to the sizeable exposure to thermal coal. Hasnain projects the EBITDA margin of the nine mining companies rated by Moody's, to be around 18%. This is lower than the aggregate EBITDA margin in 2019 (20%).
In its report, Moody's said that two mining companies from Indonesia had a negative outlook. The two companies are PT Inalum (Persero) which received a “Baa2” rating from Moody's with a negative outlook, and PT Indika Energy Tbk (INDY) which received a Ba3 rating and a negative outlook. (KR/AR)