IJN Capital Sdn Bhd - 2012

MARC has affirmed its AAAIS rating on the RM30 million outstanding sukuk issued under IJN Capital Sdn Bhd’s (IJN Capital) Sukuk Musyarakah Programme with a stable outlook. IJN Capital is a wholly-owned special-purpose company of IJN Holdings Sdn Bhd (IJN Holdings). The affirmed rating and stable outlook incorporates the favourable competitive position of IJN Holding’s main operating entity, Institut Jantung Negara (IJN), in the cardiovascular and thoracic healthcare segment, its long operating track record and ownership by the Ministry of Finance (MOF).

The rating is also underscored by the fully funded reserve account that is sufficient to cover the final redemption of the outstanding RM30 million under the rated programme in March 2013. MARC notes that the group has continued to undertake refurbishment in its existing buildings to set up centres for pediatric congenital and associated heart-related illnesses which would further complement its current activities. These are expected to be funded by internally generated funds.

For financial year ended December 31, 2011 (FY2011), revenue and profit before tax increased by 13.1% and 15.4% to RM419.1 million and RM41.2 million respectively in line with the 7.5% growth of patients (or 15,626 patients) during the year. However, given its status as a government-owned health institution with a regulated fee structure, its operating profit margin, despite increasing marginally to 4.71% (FY2010: 2.23%), remains thin. Its debt leverage is favourable, declining to 0.12 times, as a result of the redemption of RM25 million sukuk under the rated programme in March 2011. IJN’s overall liquidity position remains strong, with cash and cash equivalents standing at RM160.8 million in FY2011 (FY2010: RM117.4 million), which is sufficient to meet its near-term liabilities of RM135.7 million.   

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