S&P upgrades Matahari Putra Prima

Standard & Poor's said it raised Indonesia-based PT Matahari Putra Prima Tbk.'s corporate credit rating to B+ from B-. The outlook is stable.

S&P said the upgrade reflects Matahari's strengthening business profile due largely to its expansion into hypermarkets, which is driving a gradual turnaround in its supermarket division. At the same time, better operating efficiency, sales productivity and lower shrinkage have improved the company's margins, and Indonesia's large market provides significant opportunities for Matahari to grow its market share.

The company's ratings are partly constrained, however, by its highly leveraged financial profile, with debt to EBITDA of 3.3x, debt to capitalization of 60.1% and funds from operations to total debt of 23.9% at Dec. 31, the agency said.

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