Pembinaan Mitrajaya Sdn Bhd’s (PMSB) ratings assigned to the Islamic debts reflect the strength of the issue structure, which includes the assignment of contract proceeds for the purpose of the redemption of the Murabahah Multi-Option facility; its good track record and competitive position, improvement in economic outlook; and the company’s improving financial position. The ratings are still moderated by the cyclical nature of the construction industry and the sensitivity of the company’s cash flow to minor adverse developments.

PMSB’s strong business position and operating efficiency is backed by an established track record of quality work, and timely completion of projects. Large completed construction projects include KLIA related projects, construction of the North-South Expressway – Central Link & KLIA Expressway, Genting Group projects and construction of the Simpang Pulai-Kuala Berang highway. The group’s major on-going projects include Putrajaya building and infrastructure works which are expected to be completed in 2004; the construction and upgrading of road works of the Federal Highway from Kuala Kangsar to Gerik and Lenggong to Sauk (expected completion in 2005); and the construction of the Bukit Beruntung-Berjuntai highway under the University Industry Selangor project (expected completion in 2005). PMSB also expects a steady revenue contribution from its internal project, namely Puchong Prima, an integrated township comprising residential and commercial properties located to the south of the established townships of Subang Jaya and Bandar Sunway.

Revenue rose significantly to RM261.0 million in FY2002 from RM199.6 million previously, reflecting the completion of a number of construction projects and the recognition of on going project revenues based on percentage of completion. As at December 2003, PMSB’s outstanding order book stood at RM412.71 million, sufficient to sustain the company’s revenue base for the next two to three years. The company’s debt servicing capacity further strengthened in FY2002 aided by the surplus position in working capital, but cash flow remains sensitive to any slight changes in revenue and receivables collections. Despite an increase in total debt obligation in FY2002, PMSB’s debt leverage improved slightly to 1.80x in FY2002 (FY2001: 1.88x), backed by an enlarged shareholders’ funds. The pro-forma debt-to-equity ratio with the issuance of the RM50 million MUNIF is 2.24 times, which is still below the cap of 3.5 times under the issue structure.