S&P lowers Multiplar view to negative

Standard & Poor’s said it revised the outlook on PT Multiplar Tbk. to negative from stable, along with the outlook on its 50.2% subsidiary PT Matahari Putra Prima Tbk.

The agency also said it affirmed the B+ long-term corporate credit rating on both companies and lowered their long-term Asean regional scale ratings to axBB- from axBB.

The outlook revision reflects sustained losses in Multipolar’s non-retailing operations, which could compress the company’s consolidated margins and keep its EBITDA interest coverage at less than 2x for the next 12 months, S&P said.

The agency said it believes some of the steps Multipolar is undertaking, including reducing sales through third party agents, could help improve the quality of its customer base, reduce the churn rate and ultimately contain losses.

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