One Upgrade; One Downgrade
On rating action, Fitch Rating Indonesia has upgraded BFI Finance Indonesia, Tbk’s (BFIN IJ) national rating to ‘AA-(idn)/Stable’ from ‘A+(idn)/Stable, underpinned by its sound financial performance and balance sheet amidst slowing economic activity. It is reflected by improved profitability and capitalization measures with the company’s ROE and ROA posted at 18.0% and 6.3% respectively, slightly higher than industry average of 11.5% and 3.7% respectively. On contrary, Tower Bersama Infrastructure, Tbk’s (TBIG IJ)’s long term foreign currency rating was downgraded by Fitch ratings to ‘BB-/Stable’ from ‘BB/Stable’ with its national long term rating though was affirmed at AA-(idn).The downgrade on long term currency rating was driven by continued weakness in free cash flow generation due to an aggressive shareholder return policy as well as high finance cost and capex needs. The company’s liquidity position though remains adequate with unrestricted cash balance of IDR405bn at end-September 2016 and USD245m undrawn banking facility, still sufficient to meet short-term maturities of IDR190bn over the next 12 months.
