Pefindo Raises GIG Ranking, Financial Conditions Are Assessed Healthy With Strong Market Prospects

Photo: Doc. Cement Indonesia Group (SIG)

JAKARTA - PT Pemeringkat Efek Indonesia (Pefindo) raised the rating of PT Semen Indonesia (Persero) Tbk (SIG) to IdAAA Stable from the previous idAA+ Positive. The increase in ranking reflects the implementation of discipline by issuers coded SMGR towards financial policy, the performance of issuers as strategic industries supporting state development, strong market positions supported by well-verified production and logistics facilities, as well as conservative financial profiles.

In line with the increase in Company rankings, Pefindo also raised the rank of Shelf-Registered Bonds II, as well as Shelf-Registered Bonds I Phase II Series B Year 2019, and Shelf-Registered Bonds II Phase I Series A and Series B Year 2022 published by the Company, to idAA from the previous idAA+. GIS is considered to have a strong and superior (superior) ability to fulfill its long-term financial commitment to debt securities, compared to other issuers in Indonesia.

The journey of GIS ranking by Pefindo began in 2017 with the idAA+ Stable rating, then decreased in 2019 after the acquisition of PT Solusi Bangun Indonesia Tbk (dh. PT Holcim Indonesia Tbk) to negative idAA+, and fell back to stable idAA in the same year. The decline was mainly due to a significant increase in interest bearing debt value to IDR 33.6 trillion as of June 2019.

Over time, GIS proved its commitment to lowering its loan through optimal loan management and optimizing cash flow, thus making the GIS ranking again rise to IdAA+ Stable in 2021, then in 2023 it will rise again to positive idAA+. In 2024, for the first time SIG will reach the highest ranking from Pefindo, namely stable idAAA where the interest bearing debt value has decreased significantly as of June 2024 to IDR 13.6 trillion.

SIG Corporate Secretary, Vita Mahreyni said, this GIS rating increase reflects the healthy financial condition and strong company position as a market leader for the building materials industry in Indonesia. As a step to continue the commitment to maintain positive performance, GIS focuses on strengthening capabilities in providing innovative building materials solutions that are environmentally friendly, increasing operational excellence in production activities and distribution network management, as well as good financial management.

"SIG continues to strive to secure the sales and revenue sector from the domestic market through optimizing market and price management, modernizing the retail ecosystem, and maintaining leadership in the National Strategic Project (PSN), including development projects at IKN. In the midst of challenging industrial situations, GIS is also exploring new growth opportunities by developing business and products, as well as maximizing the regional market," said Vita Mahreyni, in a statement, Tuesday, August 20.

To increase the Company's competitiveness, GIS continues to strive to achieve increased operational excellence by applying circular economic principles in production activities through the use of alternative fuels from industrial waste, biomass, and urban waste processed into refuse-derived fuel (RDF). The use of these alternative fuels not only helps in reducing the use of fossil fuels, but also supports the Company's initiative to preserve the environment and decarbonize.

The production process in SIG factories is supported by the implementation of digitalization through the utilization of machine learning, big data and artificial intelligence for optimization of production activities to achieve energy use efficiency and increase productivity. To accelerate the achievement of decarbonization, SIG is also developing new renewable energy through the use of solar panels in its operational units, as well as optimization of hot exhaust gas from the cement production process (Waste Heat Recovery Power Generation).

Vita Mahreyni added, to support sustainable profitability growth, GIS encourages efficiency through operational optimization. Maximum cash and capital management is also carried out to keep the Company's liquidity strong with good solvency.

Evidently, throughout the first half of 2024, SIG was able to maintain financial resilience by recording cash flow from positive operations, so as to continue to lower debt balances and maintain a healthy solvency ratio. In the first semester, GIS paid off Phase II Sustainable Bonds in 2019, worth IDR 3.36 trillion. The bond repayment resulted in a decrease in liabilities having an impact on GIS interest and a decrease in financial expenses, thus supporting positive profitability achievements.

"SIG is committed to maintaining positive performance growth so that it can fulfill long-term financial commitments, as well as providing added value for all stakeholders," said Vita Mahreyni.