Moody's announces completion of a periodic review of ratings of Bukit Makmur Mandiri Utama (P.T.)

(Singapore, April 30, 2019) -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Bukit Makmur Mandiri Utama (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.

Bukit Makmur Mandiri Utama (P.T.)'s (BUMA) Ba3 corporate family rating (CFR) reflects (1) its well-recognized franchise and established relationships with Indonesia's largest coal concession holders; (2) its position as Indonesia's second-largest coal mining services contractor by overburden volume; (3) cash flow visibility accorded by the long-term contractual nature of its revenue base; and (4) its continued adherence to maintain a prudent capital structure with conservative financial policies.

At the same time, BUMA's CFR is constrained by (1) its high degree of customer concentration risk, namely to Berau Coal (P.T.); (2) heavy capital spending in 2018, which should decline over the next 12-18 months; and (3) exposure to geographic concentration and cyclicality in the thermal coal sector. (ends)