Research Update: PT Japfa Outlook Revised To Stable On Improving Liquidity Buffer; 'BB-' Rating Affirmed

The liquidity profiles of PT Japfa Comfeed Indonesia Tbk. (PT Japfa) and its Singapore-based parent Japfa Ltd. have improved following significant repayment of short-term debt and the support of large multiyear undrawn committed bank lines. We expect the companies' operating profit margins and interest coverage ratio will improve modestly, while they prudently control capital expenditure (capex). These should support the credit profiles over the next 12-24 months. On March 1, 2021, S&P Global Ratings revised its outlook on PT Japfa to stable from negative. At the same time, we affirmed our long-term issuer credit rating on the company and the long-term issue rating on its senior unsecured notes at 'BB-'. The stable outlook reflects our view that PT Japfa will

...- The liquidity profiles of PT Japfa Comfeed Indonesia Tbk. (PT Japfa) and its Singapore-based parent Japfa Ltd. have improved following significant repayment of short-term debt and the support of large multiyear undrawn committed bank lines. - We expect the companies' operating profit margins and interest coverage ratio will improve modestly, while they prudently control capital expenditure (capex). These should support the credit profiles over the next 12-24 months. - On March 1, 2021, S&P Global Ratings revised its outlook on PT Japfa to stable from negative. At the same time, we affirmed our long-term issuer credit rating on the company and the long-term issue rating on its senior unsecured notes at '##-'. - The stable outlook reflects our view that PT Japfa will maintain sufficient liquidity buffer, proactively refinance its U.S. dollar bond and domestic notes maturing in 2022; and maintain a disciplined capex plan amid a steady recovery of operations....

Research Update