PEFINDO: PT Wijaya Karya (Persero) Tbk rated idA with stable outlook

(June 13, 2022)--PEFINDO has affirmed its idA ratings for PT Wijaya Karya (Persero) Tbk (WIKA), its Shelf Registered Bond I Year 2020, and its Shelf Registered Bond II/2021. PEFINDO has also affirmed its idA(sy) ratings to WIKA’s Shelf Registered Sukuk Mudharabah I/2020 and Shelf Registered Sukuk Mudharabah II/2021. The outlook for the corporate rating is “stable”.

The corporate rating reflects WIKA’s strong market position in the domestic construction industry, diversified revenue sources, and strong financial flexibility. The rating is constrained by the Company’s aggressive financial profile, risks from expansion into new businesses, and the inherently volatile business environment.

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

Established in 1961, WIKA is one of the state-owned enterprises (SOE) in the construction sector. It covers infrastructure, building, property, realty, investment, energy, precast, and construction engineering segments. As of December 31, 2021, its shareholders were the Indonesian government (65.05%) and the public (34.95%). (ends)