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Monday, June 14, 2010

Fajar Wisesa rating outlook improved to positive

BI / exchange
14/06/2010
Irvin Avriano A.

Fajar Wisesa rating outlook improved to positive

JAKARTA: PT Fitch Ratings Indonesia upgraded long-term national rating of PT Fajar Surya Wisesa Tbk from BBB+(idn) level to A-(idn) level due to the increase of company's EBITDAR.

In a rating statement by Fitch Ratings today noted the financial performance was affected by increased domestic demand from containerboard and boxboard since the 2ndQ/2009.

Issuers managed to increase earnings before interest, taxes, depreciation, amortization, and rent (EBITDAR), which was recorded at the end of 2009 worth IDR569.6 billion compared with at the end of 2008 amounted to IDR532.6 bio in 2008. Company also listed EBITDAR amounted to IDR191.5 bio in 1stQ/2010.

In addition, research also mentioned the company's leverage level has also improved because of debt reduction as reflected by the ratio of net debt to EBITDAR of 2.3 times at the end of 2009 compared with 3.1 times at the end of 2008. The Company recorded a leverage of 1.5 times in 1stQ/2010.

The research also shows long-term ratings outlook for Fajar Wisesa local and foreign currency also upgraded by Fitch Ratings from stable to positive levels. Rank companies set back on B level.

Fitch has also set the bond rating of Fajar Wisesa subsidiary, Fajar Paper Finance BV, worth US$100 bio in B level and recovery rating at the level of RR4. The bonds were fully secured by Fajar Wisesa.

The company established in 1988 and listed in the market in 1994. The company produces sack kraft paper for packaging of cement, fertilizer, and agricultural products, linerboard and corrugated medium paper for carton box packaging and coated duplex board for display packaging.

Fajar Wisesa intend to invrease their production by buying a new paper machine that could jack-up their production from currently 700,000 metric ton per year to 1,000,000 metric ton per year.

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