Moody's announces completion of a periodic review of ratings of Adaro Indonesia (P.T.)

(Singapore, December 16, 2020) -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Adaro Indonesia (P.T.) and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.

This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

Key rating considerations are summarized below.

Adaro Indonesia (P.T.)'s Ba1 corporate family rating reflects 1) its position as one of the largest single-location coal producers in the southern hemisphere with substantial reserves; 2) track record of profitability, supported by vertically integrated operations; 3) diversified customer base; and 4) track record of commitment to prudent financial policies.

Adaro's rating also incorporates 1) its limited operational and geographic diversity as thermal coal sales will remain a key contributor to the group's revenue and earnings over the next few years; and 2) the elevated environmental risks associated with the thermal coal sector.

The rating reflects the credit quality of its parent Adaro Energy Tbk (P.T.), given the strong operational links between the companies, including (1) Adaro Energy's 88.5% ownership in AI; (2) AI benefiting from Adaro Energy's vertically integrated operations across the coal supply chain; and (3) Adaro Energy guaranteeing all of AI's debt.

This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.

The principal methodology used for this review was Mining published in September 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

This announcement applies only to EU rated and EU endorsed ratings. Non EU rated and non EU endorsed ratings may be referenced above to the extent necessary, if they are part of the same analytical unit. (ends)