MARC has upgraded the rating of Kelang Multi Terminal Sdn Bhd’s (KMT) RM350 million Floating Rate Notes to AA, reflecting the company’s consistently strong operational performance underlined by the steady growth in container throughput; commendable financial profile as well as the Government’s participation in developing Port Klang into a Transshipment and Megahub/Free Trade Zone. However, as competition in the industry is expected to become stiffer, operational efficiency of port operators and the competitiveness of their tariff structure are important to sustain their position.

KMT is the operator of Westport; one of the largest terminals in Malaysia with a 15-metre deep draft located in Port Klang catering to modern fifth generation vessels. Todate, Westport has a capacity of 2.8 million twenty-foot equivalent units (TEUs) for container cargoes and 13.0 million tonnes per annum for conventional cargoes. Going forward, KMT will continue to expand its capacity to meet rising demand in the global markets.

Since commencement of operation, Westport had been experiencing tremendous growth in terms of container and conventional cargoes throughput. Facilitating the growth in container volume is the port’s state-of-the-art terminal facilities, excellent productivity, good infrastructure support and information technology services and its competitive tariffs.

Westport’s productivity measures are in line, and in some cases, better than fastport standards. Its strategic alliance with Hutchison Port Holdings, a major shareholder, benefited Westport in terms of operational expertise and technology transfer. Over the years, the port has also enjoyed support from the Main Line Operators, such as CMA, Goldstar, China Shipping Container Lines, Hanjin, Evergreen and Maersk Sealand.

FY2004 witnessed another strong financial performance year for KMT, posting the highest revenue and pre-tax profit in its operating history while maintaining an operating profit margin of consistently above 30% for the past years, indicating KMT’s efficiency in a capital-intensive environment. Against this backdrop, debt leverage and cash flow position have further strengthened attributed to increased profits and lower financing costs.

In February 2005, KMT had redeemed Tranche 1 of the FRNs amounting to RM50.0 million as scheduled. The current outstanding balance of the FRNs stands at RM300.0 million.