S&P rates AIS highly
Despite the highly competitive environment and regulatory uncertainties, Advanced Info Service Plc's long-term corporate rating was affirmed yesterday by Standard & Poor's Ratings Services as "A-" with a stable outlook.
"The rating on AIS reflects its favourable market position and strong financial profile," credit analyst Cheow Hon Lee said in a statement issued from S&P's Singapore office."The stable outlook is based on the expectation that AIS will sustain its leading market position and strong cash flows to cope with potential pressure on its profitability from increased competition," he said. The highly competitive environment and regulatory uncertainties act as constraints on the rating. If developments on issues such as concession conversion and the interconnection regime have a significantly adverse impact on AIS's credit profile, or if its credit metrics weaken for an extended period, with debt to EBITDA (earning before interest, tax, depreciation and amortisation) of above 1.0 times or its ratio of funds from operations (FFO) to debt of less than 80 per cent, then the rating may be negatively affected. The rating may be positively affected if there is a sustainable strengthening of its financial profile, with debt to EBITDA below 0.5 time, and if a satisfactory market position is maintained. AIS had 17 million cellular subscribers as of March 31, or 51 per cent of the market, S&P said. The operator's strong financial profile is reflected by its ratio of funds from operations to debt of 120 per cent last year, and relatively low leverage, with debt to EBITDA at 0.7 times. The Nation
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