PEFINDO: PT Elnusa Tbk rated “idAA-” with stable outlook
Monday, April 12 2021 - 11:36 PM WIB
(April 12, 2021)--PEFINDO has affirmed its “idAA-” rating to PT Elnusa Tbk. (ELSA) and its “idAA-(sy)” rating for ELSA’s Shelf Registration Sukuk Ijarah I Phase I Year 2020. The outlook for the corporate rating is “stable”.
An obligor rated idAA differs from the highest rated obligors only to a small degree, and has a very strong capacity to meet its long-term financial commitments relative to that of other Indonesian obligors. The Minus (-) sign indicates that the rating is relatively weak within its category.
The suffix (sy) denotes the rating mandates compliance with Islamic principles.
The rating reflects ELSA’s strong business synergy with PT Pertamina (Persero), strong presence and diversification in the oil and gas services business, and strong financial profile. The rating is constrained by the volatility of the oil and gas sector and the Company’s exposure to investment risk.
The rating may be raised if ELSA significantly strengthens its business position, validated by significant growth in revenue and earnings, while maintaining its conservative capital structure and strong cash flow protection measures on a sustained basis. The rating will be lowered if ELSA aggressively finances its expansion with debt that is substantially larger than projected, which could weaken its capital structure and cash flow protection measures, without being compensated by stronger business performance, and if we view a decline in support from and ownership by its Parent. The rating could also be under pressure if the prolonged COVID-19 pandemic adversely affects its business operations. Potentially lower service fees due to a drop of oil and gas prices, resulting in significantly lower revenue, cash flow, and/or profitability, could also trigger a rating downgrade.
Established in January 1969, ELSA is engaged in integrated upstream oil and gas services, upstream oil and gas support services, and logistics and distribution services related to the downstream oil and gas sector. At the end of 2020, Pertamina – the state-owned and biggest oil and gas company in the country – was its major shareholder with a 41.1% stake. The remaining shares were owned by Pertamina Pension Fund (14.9%) and others (44.0%, including the public with ownership stakes below 5% each). (ends)