S&P shifts PT Japfa view to stable

S&P said it revised PT Japfa Comfeed Indonesia Tbk.’s outlook to stable from negative and affirmed its BB- ratings on the company and its senior unsecured notes.

“PT Japfa’s improved liquidity buffer should help it withstand potential working capital swings. The company materially reduced its reported short-term debt in the fourth quarter of 2020, to about Indonesian rupiah (Rp) 1 trillion from over Rp 4 trillion in the previous quarter. PT Japfa funded the debt repayment through a combination of cash on hand and internally generated operating cash flow,” S&P said in a press release.

The agency said it sees PT Japfa’s operating profit margins and interest coverage ratio improving modestly.

The outlook reflects the view PT Japfa will maintain sufficient liquidity buffer, proactively refinance its dollar-denominated bond and domestic notes maturing in 2022 and maintain a disciplined capex plan amid a steady recovery of operations, S&P said.

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