PEFINDO: PT Pembangunan Perumahan (Persero) Tbk rated “idA” with stable outlook

 (March 11, 2022)--PEFINDO has affirmed its “idA” ratings for PT Pembangunan Perumahan (Persero) Tbk (PTPP) as well as its outstanding bonds. PEFINDO has also affirmed its “idA(sy)” rating for Sukuk Mudharabah I Year 2021. The outlook for corporate rating is “stable”.

Debt security rated idA indicates that the issuer’s capacity to meet its long-term financial commitments on the debt security, relative to other Indonesian issuers, is strong. However, the issuer’s capacity is somewhat more susceptible to adverse effects of changes in circumstances and economic conditions than higher-rated issuers.

Suffix (sy) indicates the rating mandates Islamic principles compliant.

The corporate rating reflects PTPP’s strong presence in the national construction industry, diversified revenue sources, and relatively strong financial flexibility. The rating is constrained by aggressive financial leverage in the near to medium term following significant capital expenditure (capex), risks from expansion into new businesses, and the volatile business environment.

The rating may be raised if PTPP improves its financial leverage and debt service coverage on sustained basis supported by more steady cash flow generation from its diversified business. The rating may be lowered if it incurs a significantly higher debt than projected without a corresponding increase in its EBITDA on a sustained basis.

Established in 1953, PTPP is one of the largest construction and engineering, procurement, and construction (EPC) companies in Indonesia. It is expanding into the property, realty, and precast sectors, as well as heavy equipment rental and investment in the energy and infrastructure sectors. As of December 31, 2021, its shareholders consisted of the Indonesian government (51.0%), the Employees Cooperative (Kopkar) (0.07%), and the public (48.93%). (ends)