PEFINDO has assigned the rating of PT TBS Energi Utama Tbk (TBS) at “idA” with stable outlook

(November 8, 2022)--The corporate rating reflects TBS’ well diversified business profile with conservative capital structure as well as strong cash flow protection and liquidity measures. The rating is constrained by 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 than projected, followed by maintaining its profit margins and conservative capital structure that will improve TBS’ credit profile on a sustained basis.

The rating may be lowered if the Company generates lower revenue and/or profit margins than projected due to underperformed new projects, and if it aggressively finances its capital expenditure with substantial debt, which may trigger a more aggressive capital structure and cash flow protection measures. A significant 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 2007 and has several operating subsidiaries engaged in coal industry in Sanga-sanga, East Kalimantan, and power plants in Gorontalo and North Sulawesi. In the medium-term, the Company plans to expand the business by entering electric vehicle and renewable energy. As of September 30, 2022, its shareholders were Highlands Strategic Holdings Pte., Ltd (61.91%), Bintang Bara B.V. (8.75%), PT Toba Sejahtra (10.00%), PT Bara Makmur Abadi (5.55%), and Public (13.79%). (ends)