PEFINDO assigns idA rating to Timah's notes

(October 7, 2022)--PEFINDO has assigned its idA rating to PT Timah Tbk (TINS)’s proposed Medium-Term Notes (MTN)’s I with maximum amount of IDR626.0 billion. At the same time, PEFINDO has affirmed its idA ratings to TINS and its outstanding bonds and its idA(sy) rating for TINS’s outstanding sukuk. The outlook for the corporate rating is stable. The corporate rating reflects TINS’s very strong market position, vertically integrated operations, and strong cash flow protection measures and liquidity. These strengths are partly offset by its moderate financial policy and its exposure to the volatility of tin prices.

The rating may be raised if TINS continues to demonstrate intensive deleveraging to a conservative level by conducting cost-efficiency and generating a strong EBITDA, as well as strengthening its downstream business on a sustained basis. The rating may be lowered if it incurs significantly higher debt than projected without being compensated by better business performance and if the fluctuation of global tin price significantly impairs its revenue and profitability. Unfavorable regulatory changes such as the implementation of recent government plans on ingot export ban may also potentially impair the Company’s cash flow generation and credit profile, considering the substantial revenue contribution from the export market.

Founded in August 1976, TINS is a vertically integrated mining company in Indonesia focused on producing tin ingots. Its main mining operations are in Pangkal Pinang, Bangka Belitung. As of June 30, 2022, its A class shares were owned by the Indonesian government, and its B class shares by PT Indonesia Asahan Alumunium (Persero) (65.0%) and the public (35.0%). (ends)