Moody's raises outlook for Indonesia's Chandra Asri to stable

03 March 2014 04:25  [Source: ICIS news]

SINGAPORE (ICIS)--Ratings firm Moody’s Investors Service on Monday upgraded its outlook of Indonesia’s Chandra Asri Petrochemical (CAP) to stable from negative previously amid expectations of improved operating performance this year.

“CAP's operating performance, which improved substantially in 2013, is expected to generate mid to high single-digit EBITDA [earnings before interest, tax, depreciation and amortisation] margins in 2014, bolstered by earnings from its new butadiene (BD) plant, which became operational in the fourth quarter of 2013,” the firm said in a statement.

However, risks associated with CAP’s aggressive capital spending for 2014-2015 may dampen the company’s future outlook, it said.

CAP last year said that it plans to expand its naphtha cracker’s capacity at Cilegon in Indonesia by 43% and also build a synthetic rubber unit in the country.

“CAP's performance in 2015 is expected to soften mildly due to the tie-in works required to integrate its ongoing naphtha cracker expansion and scheduled maintenance,” Moody’s said without elaborating further.

CAP operates the only naphtha cracker in Indonesia.

By: Nurluqman Suratman

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