MARC has reaffirmed Pembinaan Mitrajaya Sdn Bhd’s (PMSB) RM50 million Murabahah Multi-Option Notes Issuance (MONI) Facility at MARC-2ID /A-ID (A minus, Islamic Debt). The ratings reflect the support provided by the irrevocable and unconditional corporate guarantee granted by PMSB’s holding company, Mitrajaya Holdings Berhad (MHB) a company listed on the main Board of Bursa Malaysia. Additionally, PMSB’s RM55 million BAIDS which were reaffirmed at A-ID in September 2004, were fully redeemed in March 2005.

MHB, mainly involved in construction, property development, manufacturing and trading; and health care, has gained a strong foothold in the property development market in South Africa since its entry in 1998, and this has helped to significantly counter the difficult operating environment facing its Malaysian construction operations.

PMSB is the construction arm of the Group and continues to be a major revenue contributor to the MHB group. For FY2004 however, PMSB’s revenue declined by 33.4 percent year on year. In tandem with the lower revenue, the company posted a loss before tax of RM1.1 million. The lacklustre performance was partly due to lower progress billings as a sizable portion of revenue from its projects was recognised in the previous fiscal year (i.e. FY2003). This, together with higher building materials and other construction related costs affected PMSB’s profitability. PMSB registered an operating cash flow deficit position during the period under review, mainly attributed to the loss-making position.

PMSB’s 12 months unaudited results as at 31 December 2005 reflected a return to profitability from the loss in 2004 with the debt to equity level improving to 0.99 times from 2.37 times in 2004. This is well within the cap of 3.5 times under the issue structure. Despite the overall decline in the construction sector and increased competition for existing projects in the country, PMSB has managed to remain competitive and as at December 2005, had an outstanding order book of RM261.3 million.

At the Group level, MHB, based on its 12 months unaudited results ended 31 December 2005, recorded an 18.5% increase in revenue to RM277.0 million and a 26.4% increase in profit before tax to RM18.1 million, due to higher revenue contributions from construction, property development and its quarry and premix operations. Going forward, the significant revenue contributions from the Group’s South African operations are expected to continue.