The reaffirmation of Pembinaan Mitrajaya Sdn Bhd’s (PMSB) long term rating of A-ID (A minus, Islamic Debt) and short term rating of MARC 2ID reflect the strength of the issue structure, which includes the assignment of contract proceeds for the purpose of redemption of the MONI and BAIDS facilities; its relatively good business position and proven good track record which enables the company to sustain its order book. The moderating factor is the volatility of the domestic construction industry in which PMSB is operating in.

Despite the difficult environment surrounding the local construction industry, PMSB managed to secure RM237.59 million worth of new projects compared to RM104.10 million in 2003, which reflects the strength of the company in securing contracts based on its proven track record. Some of the new contracts secured include road works for Proton City in Tanjung Malim, Pulau Tioman airport, road works and a water sports complex in Putrajaya. PMSB had completed projects that were due in 2003 on time without any LAD payments being made despite the difficult operating environment. As at June 2004, PMSB’s outstanding order book stood at RM521.27 million. Some of the company’s outstanding projects include a community centre in Precinct 11 Putrajaya, armed forces staff residence in Kem Kementah Lembah Kelang and road works in respect of the highway from Kuala Kangsar to Gerik. 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.

PMSB’s performance in FY2003 was not as impressive as in FY2002. Revenue rose slightly from RM261.05 million in FY2002 to RM269.31 million in FY2003 as most of the current projects are still in the early stages of construction with the bulk of revenue from completed projects being recognized in the previous year. PMSB’s outstanding order book is sufficient to sustain the company’s revenue base for the next two to three years. Cash flow coverage ratios decreased in FY2003 reflecting the reduction in cash flow from operating activities. Borrowings increased slightly during FY2003, increasing PMSB’s debt-to-equity to 2.07 times. The debt leverage ratio has been capped at 3.5 times, under the issue structure.