KUALA LUMPUR: Petroliam Nasional Bhd says its strong fundamental remains unchanged, despite Fitch Rating's recent downgrade on its long-term foreign and local currency issuer default ratings (IDRs).
Fitch has downgraded Petronas' credit rating to BBB+, with a stable outlook, from A-.
The revision of the credit ratings was made following the downgrade of Malaysia's credit sovereign rating to BBB+ from A- last Friday.
In a statement today, Petronas said under Fitch's government-related entities rating criteria, the group's ratings continued to be capped to that of the sovereign so long as the company sustainably generates more than 10 per cent of the revenues of the government.
Petronas had accounted for more than 15 per cent of Malaysia's revenue over the last five years.
"Petronas' standalone credit profile (SCP), as assessed by Fitch, has remained unchanged since 2016, at 'aa-', which is four notches above that of the sovereign compared to previous three notches above.
"The 'aa-' SCP is maintained on the back of Petronas' strong financial and business profile," it said.
The group said it had been in a net cash position since 2006 and the lowest through-the-cycle leverage and highest interest-coverage ratio among 'AA-' rated peers.
"Petronas is also able to maintain its strong financial profile despite the economic downturn and disruptions following the Covid-19 pandemic.
"The 'aa-' SCP also reflects Petronas' strong business profile, its position as a large-scale and fully integrated oil and gas producer as well as diverse operations in upstream, liquefied natural gas (LNG), and downstream refining and petrochemicals.
"Petronas would like to emphasise that our strong fundamentals remain unchanged. Petronas has consistently maintained a conservative financial policy, stringent capital discipline and focus on cost optimisation towards ensuring preservation of liquidity which has enabled the company to withstand volatility and shocks in the market," it added.