Fitch revises Wijaya Karya view to negative

Fitch Ratings said it revised the outlook on PT Wijaya Karya (Persero) Tbk. to negative from stable. The long-term foreign- and local-currency issuer default ratings are affirmed at BB.

At the same time, Fitch revised the outlook on the company’s national long-term rating to negative from stable and affirmed the rating at AA-(idn).

“Our rating case assumes that business activities in Indonesia will gradually improve from late 2020, and major project tenders will resume in 2021. This could boost WIKA’s new contract growth in the next few years. However, a prolonged pandemic may weaken the recovery in new order wins and lengthen WIKA’s working-capital cycle as payments are delayed, which will weaken its financial profile. The negative outlook reflects these risks to our forecasts in the medium term,” Fitch said in a press release.

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