profile search
latest updates
Press Release
31 Mar | Friday
RAM Ratings reaffirms TIME dotCom’s AA3 sukuk rating

RAM Ratings has reaffirmed the rating of TIME dotCom Berhad’s (TIME or the Group) RM1 billion IMTN Programme (2015/2035) at AA3/Stable. The rating is anchored by TIME’s sound business position in the fixed-line space and the earnings diversity conferred by its international bandwidth business and data centre, which had translated into a sturdy financial showing. Nonetheless, the rating is constrained by TIME’s relatively small market share of the wholesale and enterprise fixed-line markets.
 
The fixed-line division will remain the key contributor to the Group’s earnings, supported by the strong performance of the enterprise and wholesale segments as well as encouraging growth in the retail segment. Meanwhile, TIME’s participation in the trans-Pacific Unity North Cable System (UNITY), trans-Pacific cable system (FASTER) and Asia Pacific Gateway cable system (APG) as well as its future involvement in the Asia-Africa-Europe (AAE-1) cable system is expected to generate healthy earnings over the next few years given the increasing demand for data as a result of higher internet usage. The Group’s data-centre business, meanwhile, has continued to enjoy strong topline growth while its margins remained stable.
 
As part of its ASEAN expansion plans, TIME had established its presence in Vietnam and Thailand via the acquisition of stakes in CMC Telecommunications Infrastructure Corporation and KIRZ Co Ltd, respectively, over the last 2 years. The Group recently announced a proposed acquisition of a 38.85%-stake in Symphony Communication Public Ltd Company (Symphony Communication) in Thailand for approximately THB1,542.2  million (equivalent to about RM196 million). Subsequent to the proposed acquisition, TIME intends to obtain additional shares in Symphony Communication via a rights offering such that the Group’s stake in the former does not exceed 49%. Elsewhere, TIME intends to strengthen its foothold in ASEAN either via joint ventures or acquisition of existing telecommunication companies.
 
In fiscal 2016, the Group incurred sizeable capex for the enhancement and expansion of its fibre network and the deployment of new submarine cables. Nevertheless, its debt load remained small as TIME had utilised proceeds from the sale of its Digi shares to repay its ringgit-denominated loans and to fund its capex requirements. We have factored in potential acquisitions within the region (including the proposed acquisition of a partial stake in Symphony Communication) and the deployment of the AAE-1 submarine cable system as well as other capex needs which will be funded by a mix of internal funds and debt. These would correspondingly reduce the Group’s funds from operations debt cover to 0.38 times in 2017. While we expect the Group’s cashflow-protection metrics to weaken as a result of additional borrowings to fund capex, its financial profile is anticipated to remain strong. 

source: RAM Rating Services Berhad
Print Mail Twitter LinkedIn Facebook Google+
Past Articles
2017
September
August
July
June
May
April
March
February
January
2016
December
November
September
July
June
May
April
March
2015
June
May
April
March
February
January
2014
December
November
October
September
August
July
June
May
April
March
February
January
2013
December
October
July
May
April
March
2012
December