PT Japfa Comfeed Downgraded To 'B+' On Weakened Cash Flows Adequacy Ratios, Capital Structure; Outlook Stable

Japfa's margins and cash flows are likely to remain thin over the next 12 months at least because of tough conditions in Indonesia's downstream poultry segment. We also expect the debt of the Indonesia-based integrated poultry producer to remain elevated, and its cash flow adequacy to remain thin. The weaker rupiah and Japfa's growing proportion of debt due in the next 24 months have also weakened the company's capital structure. We are lowering our long-term corporate credit rating on Japfa and the long-term issue rating on the company's guaranteed senior unsecured notes to 'B+' from 'BB-'. We are also affirming our 'axBB' long-term ASEAN regional scale rating on the company. The stable outlook reflects our expectation that Japfa's FFO-to-debt ratio

...+ Japfa's margins and cash flows are likely to remain thin over the next 12 months at least because of tough conditions in Indonesia's downstream poultry segment. + We also expect the debt of the Indonesia-based integrated poultry producer to remain elevated, and its cash flow adequacy to remain thin. + The weaker rupiah and Japfa's growing proportion of debt due in the next 24 months have also weakened the company's capital structure. + We are lowering our long-term corporate credit rating on Japfa and the long-term issue rating on the company's guaranteed senior unsecured notes to 'B+' from '##-'. We are also affirming our 'axBB' long-term ASEAN regional scale rating on the company. + The stable outlook reflects our expectation that Japfa's FFO-to-debt ratio will stabilize at 12%-14% over the next 12-18 months owing to tough operating conditions. We also expect the company to maintain good access to domestic banks. SINGAPORE (Standard & Poor's) April 28, 2015--Standard & Poor's Ratings...

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