Standard and Poor’s (S&P) Global Ratings upgraded PT Cikarang Listrindo Tbk (IDX: POWR) debt securities grade from BB to BB+. Photo: Privacy.

JAKARTA (TheInsiderStories) – The international rating agency, Standard and Poor’s (S&P) Global Ratings upgraded PT Cikarang Listrindo Tbk (IDX: POWR) debt securities grade from BB to BB+, the highest in the company’s achievements.

In a press release on Tuesday (06/11), Cikarang Listrindo management claimed that it is now the third best private company, after PT Astra International Tbk (IDX: ASII) dan PT Profesional Telekomunikasi Indonesia.

Meanwhile, for non-investment grade private category, POWR ranks are the top of all private companies assessed by the S&P. Issuers engaged in the electricity sector are considered to have good prospects in line with the improving economic conditions in Indonesia.

S&P said that the company’s performance will remain good because the ability to produce strong financial performance with leverage is maintained and operates efficiently in the next 12 months to 18 months. This condition was also reflected in the quarter I/2019 performance in which POWR posted a net profit of US$27.5 million or grew 20.1 percent on an annual basis.

“We raised the rating on POWR because we believe the company is well positioned to benefit from Indonesia’s solid growth prospects. This is given POWR’s captive market position and the improved credit quality of its counterparties such as PT Perusahaan Listrik Negara (PLN),” the agency said.

“The stable outlook on POWR reflects our expectation that the company will maintain stable cash flows, moderate leverage, and have efficient operations over the next 12-18 months,” it said.

On the other hand, the POWR is called having a maintained debt risk. This can be seen from the level of net debt to Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) 1.6 times or far beyond the minimum requirements.

POWR currently serves 2,400 industrial customers in five industrial estates in Cikarang, West Java. The company owns and operates the gas and coal-fired power plants with capacities of 864 megawatts (MW) and 280 MW respectively. Thus, the total installed POWR generating capacity is currently 1,444 MW.

The company plans to commercialize the use of new and renewable energy plants in 2019. This is one of the company’s transformations in providing better services. The company budgeted capital expenditure of around $40 million – $50 million obtained through the company’s internal funding. About $20 million – $25 million of budgeted capital expenditure will be used to maintain gas and coal power plants.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com