Fitch Ratings has affirmed PT Mitra Pinasthika Mustika Tbk's (MPM) Long-Term Issuer Default Rating at 'BB-' with a Stable Outlook. The agency has also affirmed the motorcycle distributor's senior unsecured rating at 'BB-' and its USD200 million 6.75% senior notes due 2019 issued by MPM Global Pte. Ltd at 'BB-'. MPM's rating reflects its strong market position in motorcycle distribution in East Java, Indonesia and motorcycle oil lubricants in the domestic market.
The inherent cyclicality of the auto industry is balanced by MPM's leverage profile and stable cash flow from its auto services segment. We believe MPM has flexibility over its capital expenditure. Challenging Auto Environment, Gradual Recovery: MPM continued to face a challenging environment because of weaker purchasing power in Indonesia.
The company's motorcycle sales volume dropped 11% yoy to 406,000 units in 1H17, in line with the industry. Car sales volume fell 67% yoy in 1H17 as the company reduced its stores amid strong competition. Nissan and Datsun cars, which MPM distributes, continued to lose market share as the brands did not launch as many new products as competitors. The company this year closed six of its 11 car dealerships that were not profitable. We do not expect the operating environment to deteriorate further, and forecast Indonesia's GDP growth to be higher in 2018 and 2019 than in 2017. (end)
IQPLUS
Komentar
Posting Komentar