Moody's announces completion of a periodic review of ratings of Indika Energy Tbk (P.T.)

(Singapore, December 16, 2020) -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Indika Energy Tbk (P.T.) and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.

This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

Key rating considerations are summarized below.

Indika Energy Tbk (P.T.)'s (Indika) Ba3 corporate family rating reflect the company's long operating track record; the cash flow generation from its 91%-owned coal mining subsidiary, PT Kideco Jaya Agung (Kideco); good liquidity; and adherence to prudent financial policies.

However, the rating is constrained by 1) volatile earnings and operating cash flow from Kideco, PT Petrosea Tbk (Petrosea) and PT Mitrabahtera Segara Sejati Tbk (MBSS), caused by the cyclical nature of the coal industry; the modest contract order book at Petrosea and PT Tripatra Multi Energi (Tripatra); and the execution risk surrounding its strategy to further diversity earnings away from thermal coal.

This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.

The principal methodology used for this review was Mining published in September 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology. (ends)