PEFINDO: PT Timah Tbk (TINS) rated idA with stable outlook

(September 11, 2023)--PEFINDO also has affirmed its idA ratings for TINS’s Shelf-Registered Bond (SR) I and MTN I as well as idA(sy) rating for TINS’ SR Sukuk Ijarah I. The corporate rating reflects.

TINS’ strong market position, vertically integrated operations, and strong support from the shareholder. These strengths are partly offset by its moderate financial policy, its exposure to risk from illegal mining, 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, 2023, its A class share was owned by the Indonesian government, and its B class shares by PT Mineral Industri Indonesia (Persero) (65.0%) and the public (35.0%). (ends)