PEFINDO has affirmed its idA ratings to PT TBS Energi Utama Tbk

(April 2, 2024)--PEFINDO has affirmed its idA ratings to PT TBS Energi Utama Tbk (TBS) and its Bond I Year 2023. Outlook for the corporate rating is stable. The rating reflects TBS’ well diversified business, conservative capital structure and strong cash flow protection, as well as strong demand from new businesses. The rating is constrained by the risk of developing new projects and exposure to fluctuating commodity prices.

The rating may be raised if TBS successfully operates its new projects and generates higher revenue and profit margins than projected, while maintaining its conservative capital structure. The rating may be lowered if the Company generates lower revenue and profit margins than projected due to underperformed new projects. TBS’ policy to be more aggressive to finance its investment strategy or capital expenditure with substantial debt without compensating by a higher revenue may also negatively affected to its credit rating. Delays in construction projects and deterioration of the commodity prices, particularly coal, may also trigger a rating downgrade, as this will adversely affect its financial profile.

PT TBS Energi Utama Tbk was founded in 2008 and has several operating subsidiaries engaged in coal industry in East Kalimantan, coal-fired power plants in Gorontalo and North Sulawesi, waste management in Singapore, mini-hydro power plant in Lampung, and electric vehicle. The Company also plans to grow its business in renewable energy in the near to medium term. As of December 31, 2023, its shareholders were Highlands Strategic Holdings Pte., Ltd (61.478%), PT Toba Sejahtra (8.936%), PT Bara Makmur Abadi (5.514%), and public (24.073%). (ends)