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Press Release
13 Nov | Thursday
RAM Ratings reaffirms A1 rating of Lumut Maritime Terminal’s BaIDS

RAM Ratings has reaffirmed the A1/Stable rating of Lumut Maritime Terminal Sdn Bhd’s (LMT or the Company) RM60 million Bai’ Bithaman Ajil Islamic Debt Securities (2004/2017) (BaIDS).

The rating remains anchored by the continued steady cashflow from LMT’s operations and maintenance agreement with Lekir Bulk Terminal Sdn Bhd (LBT), which at present caters to the coal-unloading requirements of TNB Janamanjung Sdn Bhd. The Company’s rating is moderated by the dependence of its small port operations primarily on hinterland cargo, keeping a lid on growth potential. Meanwhile, revenues from the sale of land in the Lumut Port Industrial Park – which LMT has developed – are expected to taper, given limited land left to be sold, which will somewhat reduce its income diversity.

LMT’s credit strength reflects its healthy balance sheet, as evinced by a gearing ratio that has hovered at 0.2 times. Of note, LMT has been in a net cash position since FY Dec 2010. The Company’s funds from operations debt coverage ratio clocked in at 1.2 times for FY Dec 2013. With a light and reducing debt load, its debt protection metrics are expected to stay robust.

Under a 20-year Concession Agreement (CA) with the State Government of Perak, LMT has port operation exclusivity within a 30-km radius until July 2015. It remains to be seen whether the CA will be extended beyond next year, and we note that LMT’s exclusivity had been compromised in 2011 following the State Government’s approval of the establishment of a private jetty in Teluk Rubiah by Vale International SA.

Media contact:
Peter Kong
(603) 7628 1029
peterkong@ram.com.my

source: RAM Rating Services Berhad
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