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PEFINDO Assigns “idBBB+” Rating to PT MNC Pictures and “idA+(sy)(cg)” Rating to its Proposed Medium Term Notes Syariah Ijarah I Year 2018

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5 years ago
PEFINDO Assigns “idBBB+” Rating to PT MNC Pictures and “idA+(sy)(cg)” Rating to its Proposed Medium Term Notes Syariah Ijarah I Year 2018


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  1. Press Release January 26 , 2018 PT MNC Pictures Analysts: Emanuel Paco Tan / Niken Indriarsih Phone/Fax/E-mail: (62-21) 72782380 / 72782370 / emanuel.tan@pefindo.co.id / niken.indriarsih@pefindo.co.id CREDIT PROFILE Corporate Rating FINANCIAL HIGHLIGHTS id BBB+/Stable Rated Issues Proposed MTN Syariah Ijarah I/2018 Rating Period id A+(sy)(cg) January 22, 2018 – January 1, 2019 Rating History - As of/for the year ended Total Adjusted Assets [IDR Bn] Total Adjusted Debt [IDR Bn] Total Adjusted Equity [IDR Bn] Total Sales [IDR Bn] EBITDA [IDR Bn] Net Income after MI [IDR Bn] EBITDA Margin [%] Adjusted Debt/EBITDA [X] Adjusted Debt/Adjusted Equity [X] FFO/Adjusted Debt [%] EBITDA/IFCCI [X] USD Exchange Rate [IDR/USD] Sep-2017 (Unaudited) 481.0 0.0 345.1 558.1 146.0 139.7 26.2 *0.0 0.0 N/A 691.7 13,492 Dec-2016 (Audited) 234.4 1.4 169.5 337.1 61.8 42.1 18.3 0.0 0.0 3,502.6 312.0 13,436 Dec-2015 (Audited) 140.6 0.7 76.3 200.2 22.7 12.6 11.3 0.0 0.0 2,916.2 219.7 13,795 Dec-2014 (Audited) 90.2 0.2 63.3 94.7 7.8 2.0 8.3 0.0 0.0 3,197.8 84.4 12,440 FFO = EBITDA – IFCCI + Interest Income – Current Tax Expense EBITDA = Operating Profit + Depreciation Expense + Amortization Expense IFCCI = Gross Interest Expense + Other Financial Charges + Capitalized Interest; (FX Loss not included) MI = Minority Interest *Annualized N/A = not applicable The above ratios have been computed based on information from the company and published accounts. Where applicable, some items have been reclassified according to PEFINDO’s definitions. PEFINDO assigns “idBBB+” rating to PT MNC Pictures and “idA+(sy)(cg)” rating to its proposed Medium Term Notes Syariah Ijarah I Year 2018 PEFINDO has assigned its “idBBB+” rating to PT MNC Pictures (MNCP). PEFINDO has also assigned its “idA+(sy)(cg)” rating to MNCP’s proposed Medium Term Notes (MTN) Syariah Ijarah I Year 2018 of a maximum of IDR500 billion due in 370 days, which will be fully guaranteed by PT Global Mediacom Tbk (BMTR, idA+/Stable), the holding company of the Media Nusantara Citra (MNC) group for media business. BMTR’s rating reflects its major stakes in Indonesia’s leading and largest media companies, the wide range of media services such as television, pay TV, content, online media, and broadband internet provided by its subsidiaries, and its good operating profitability. However, BMTR’s rating is constrained by its indirect access to operating cash flow, exposure to foreign currency volatility through its subsidiaries’ US dollar-denominated debts, and intense competition in the media industry. Of the MTN proceeds, IDR300 billion will be used to finance MNCP’s working capital needs and IDR200 billion will be used to finance the purchase of programs for the development of its content library. The outlook for the corporate rating is “stable”. An obligor rated idBBB has an adequate capacity to meet its long-term financial commitments relative to that of other Indonesian obligors. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments. A debt security rated idA indicates that the obligor’s capacity to meet its long-term financial commitments on the debt security, relative to other Indonesian obligors, is strong. However, the debt security is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than higher-rated debt. The plus (+) sign indicates that the rating is relatively strong within the respective rating category. The suffix (sy) indicates that the rating mandates compliance with Islamic principles. The suffix (cg) indicates that the rating incorporates security in the form of a corporate guarantee. The corporate rating reflects MNCP’s captive market as it produces television drama series for the group, operational benefits from group synergy, and strong commitment from its shareholders. However, the corporate rating is constrained by its high working capital needs resulting in higher financial leverage, moderate cash flow protection measures, and intense competition and risks related to cyclical and unpredictable audience reception. The corporate rating could be raised if MNCP strengthens its business profile by exceeding its revenue and profitability targets on a sustained basis and diversifying its revenue through the sale of its content including movies and animation, while improving its capital structure and cash flow protection measures. The corporate rating could be lowered if it incurs substantially larger debt than projected, resulting in a weaker financial profile, particularly if its debt to EBITDA ratio exceeds 3.5x on a sustained basis and/or if we view there is less synergy between the Company and the group. The MTN rating could be lowered if the full guarantee for its principal and coupon payment is not in place, or if the rating of BMTR as the MTN guarantor is downgraded. MNCP is a production house that produces content for television in the form of drama series, film television (FTV), and animation as well as movies. It is a part of the MNC Group, the largest media group in Indonesia. As of September 30, 2017, its shareholders were PT MNC Studios International (99.99%) and PT Media Nusantara Citra Tbk (MNCN, 0.01%). http://www.pefindo.com January 2018
  2. Press Release January 26 , 2018 DISCLAIMER PT Pemeringkat Efek Indonesia (PEFINDO) does not guarantee the accuracy, completeness, timeliness or availability of the contents of this report or publication. PEFINDO cannot be held liable for its use, its partial use, or its lack of use, in combination with other products or used solely, nor can it be held responsible for the result of its use or lack of its use in any investment or other kind of financial decision making on which this report or publication is based. In no event shall PEFINDO be held liable for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses including but not limited to lost profits and opportunity costs in connection with any use of the contents of this report or publication. Credit analyses, including ratings, and statements in this report or publication are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold or sell any securities or to make any investment decision. The contents cannot be a substitute for the skill, judgment and experience of its users, its management employees and/or clients in making investment or other business decisions. PEFINDO also assumes no obligation to update the content following publication in any form. PEFINDO does not act as fiduciary or an investment advisor. While PEFINDO has obtained information from sources it believes to be reliable, PEFINDO does not perform an audit and does not undertake due diligence or independent verification of any information used as the basis of and presented in this report or publication. PEFINDO keeps the activities of its analytical units separate from its business units to preserve independence and objectivity of its analytical processes and products. As a result, certain units of PEFINDO may have information that is not available to other units. PEFINDO has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process. PEFINDO may receive compensation for its ratings and other analytical work, normally from issuers of securities. PEFINDO reserves the right to disseminate its opinions and analyses. PEFINDO’s public ratings and analyses are made available on its website, http://www.pefindo.com (free of charge) and through other subscription-based services, and may be distributed through other means, including via PEFINDO publications and third party redistributors. Information in PEFINDO’s website and its use fall under the restrictions and disclaimer stated above. Reproduction of the content of this report, in full or in part, is subject to written approval from PEFINDO. http://www.pefindo.com January 2018