MARC has reaffirmed Bintang Bulk Mover Sdn Bhd’s (BBM) RM50 million 5 year secured serial bonds rating at A- (A minus) with stable outlook, underpinned by BBM Group’s steady operating performance and stable revenue stream vis-à-vis its long term cement transportation contracts with Lafarge Malayan Cement Bhd (LMCB), the largest local cement manufacturer. The affirmation also reflects the Group’s increasingly integrated operations, through the provision of other transportation services such as inland containerized haulage and warehousing activities. Moderating factors, however, include BBM’s exposure to the cyclical developments affecting the cement industry as well as intense competition within the general haulage industry.

The Group’s revenue has been on an increasing trend since FY2001, supported by strong contribution from its subsidiary, Agenda Wira Sdn Bhd, involved in the container haulage services. Despite the 22% surged in revenue for FY2006, the Group recorded lower pre-tax profit of RM13.85 million (FY2005: RM16.3 million) attributable to higher operating cost coupled with the surge in diesel prices. Given the stable growth in domestic economic environment and resilient export activities, the haulage volume is anticipated to remain buoyant, going forward. In FY2006, approximately 42% of the Group’s total revenue were derived from cement transportation whilst 48% from container haulage services.

BBM’s extensive fleet of tankers, prime movers and trucks have transformed the Group into one of the largest second-tier hauliers in the country. The Group’s operations are supported by several operation centres spread across West Malaysia which provide logistical support and marketing services. With its niche position in the transportation of bulk cement and extensive track record, BBM is well positioned to compete effectively in the highly competitive domestic haulage industry.

The Group’s cement haulage activities are expected to continue to support its revenue and profitability levels based on the long term contracts while increasing contribution is expected from the container haulage activities. Moving forward, the Group has progressively position itself as an integrated logistic provider, offering additional business such as freight forwarding services.

Debt leverage position on consolidated basis was relatively high at 1.80 times in FY2006. Its debt-to-equity ratio, measured at company level however, stood at 1.36 times as at 28 February 2006; still within the covenanted level of 1.75 times as stipulated under the issue structure.

The Group’s CFO interest and debt coverage ratios have shown further improvement in FY2006 to 5.23x (FY2005: 5.01x). As mentioned earlier, BBM cash flow position will continue to be supported by the steady income stream from its long term contracts mainly with LMCB, and will be enhanced through its other synergistic businesses.