The rating on Indonesia-based food retailer PT Matahari Putra Prima Tbk. (Matahari) reflects our view of the high competition in Indonesia's food retailing sector. The rating also reflects the company's aggressive expansion plans, high funding requirement and execution risks, and thin operating margins. Matahari's good domestic market position and the positive growth prospects for the food retailing sector in Indonesia temper these weaknesses. We assess the company's business risk profile as "weak" and its financial risk profile as "aggressive." We expect Matahari's earnings before interest, taxes, depreciation, amortization and rent (EBITDAR) margin to dip to the lower end of the 7%-8% range we expected in 2013. This is because competition in the food retailing sector remains intense and Matahari's operating...
Companies mentioned in this report are:
- PT Matahari Putra Prima Tbk.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
This product consists of a Summary Analysis: Bi-annual (at least). An abbreviated analysis containing Standard & Poor's issuer credit ratings as of the time the article was published. The analysis includes a rating rationale - the basis on which the rating was assigned - and an outlook section if the issuer is not on CreditWatch. Financial statistics are not included. SHOW LESS READ MORE >