Wednesday, Oct 20, 2004
MARC has reaffirmed Malaysia International Shipping Corporation Berhad’s (MISC) MARC-1ID/AAAID ratings on its RM1.5 billion Murabahah Commercial Paper / Medium-Term Notes Programme (2000/2005). The reaffirmation of the ratings is predicated by the Group’s solid operating fundamentals; its dominant position in the Malaysian shipping industry particularly the liquefied natural gas segment; extensive global reach with the acquisition of American Eagle Tankers Inc. Ltd. (AET); sound financial profile characterized by improved profitability and low debt leverage; exceptional financial flexibility; and the strong support of its majority shareholder, Petroliam Nasional Berhad (PETRONAS).
With a diversified fleet of 138 vessels (as at 30 June 2004), MISC is the dominant shipping and logistics services provider in Malaysia especially in the energy-based transportation sector. MISC also has the distinction of being the largest single owner/operator of LNG tankers in the world with a fleet of 17 tankers and expected to increase to 29 tankers by 2008. As the sole transporter of LNG from Malaysia (the world’s third largest LNG exporter), MISC is in a favourable position to benefit from the growing demand for LNG transportation.
The acquisitions of AET and an additional 22% of MSE Holdings Sdn Bhd (MSEH), the holding company of Malaysia Shipyard and Engineering Sdn Bhd, making it a subsidiary of MISC; helped to broaden the Group’s earnings base. The AET acquisition has put MISC in the position of having the second largest owner-operated Aframax fleet in the world, extending its market reach to the Atlantic Basin, complementing MISC’s existing presence in Europe, Mediterranean, Arabian Gulf and the Far East. MSE acquisition is part of the Group’s strategy to strengthen and grow its heavy engineering business as well as realizing the synergistic opportunities within MISC and the PETRONAS Group as a whole.
MISC achieved a record revenue of RM7.6 billion for financial year ended 31 March 2004; a 40.0% increase from the previous year at the back of better freight rates in most of the shipping segments and incorporation of AET’s financial results into the Group. The Group’s pre-tax profit achieved higher growth of 77.5% to RM2.3 billion in FY2004 as the Group improved its operational efficiency and cost management. MISC’s operating profit margin returned to above the 30.0% level after dropping to 26.5% in the previous financial year.
The group’s strong cash flow position strengthened further over the last three years, underpinned by the relatively stable charter revenue stream from the LNG business. The balance sheet shows ample liquidity and the group’s cash flow protection measures are capable of accommodating a reasonable degree of earnings volatility in the non-LNG shipping business.
MISC’s strong internal cash generation has reduced the need for excessive external financing to fund its capital expenditure program. The Group’s debt leverage is considered low by shipping industry norms of 0.7 time as at 30 June 2004, as compared to the global industry average.
MISC enjoys exceptional financial flexibility, in the light of its substantial cash balance; its 62.44% ownership by PETRONAS; and superior access to capital markets (both local and international). Furthermore, the US Dollar denominated shipping revenue provides a natural hedge against exchange rate volatility in relation to the group’s sizeable foreign currency debt obligations.
With a diversified fleet of 138 vessels (as at 30 June 2004), MISC is the dominant shipping and logistics services provider in Malaysia especially in the energy-based transportation sector. MISC also has the distinction of being the largest single owner/operator of LNG tankers in the world with a fleet of 17 tankers and expected to increase to 29 tankers by 2008. As the sole transporter of LNG from Malaysia (the world’s third largest LNG exporter), MISC is in a favourable position to benefit from the growing demand for LNG transportation.
The acquisitions of AET and an additional 22% of MSE Holdings Sdn Bhd (MSEH), the holding company of Malaysia Shipyard and Engineering Sdn Bhd, making it a subsidiary of MISC; helped to broaden the Group’s earnings base. The AET acquisition has put MISC in the position of having the second largest owner-operated Aframax fleet in the world, extending its market reach to the Atlantic Basin, complementing MISC’s existing presence in Europe, Mediterranean, Arabian Gulf and the Far East. MSE acquisition is part of the Group’s strategy to strengthen and grow its heavy engineering business as well as realizing the synergistic opportunities within MISC and the PETRONAS Group as a whole.
MISC achieved a record revenue of RM7.6 billion for financial year ended 31 March 2004; a 40.0% increase from the previous year at the back of better freight rates in most of the shipping segments and incorporation of AET’s financial results into the Group. The Group’s pre-tax profit achieved higher growth of 77.5% to RM2.3 billion in FY2004 as the Group improved its operational efficiency and cost management. MISC’s operating profit margin returned to above the 30.0% level after dropping to 26.5% in the previous financial year.
The group’s strong cash flow position strengthened further over the last three years, underpinned by the relatively stable charter revenue stream from the LNG business. The balance sheet shows ample liquidity and the group’s cash flow protection measures are capable of accommodating a reasonable degree of earnings volatility in the non-LNG shipping business.
MISC’s strong internal cash generation has reduced the need for excessive external financing to fund its capital expenditure program. The Group’s debt leverage is considered low by shipping industry norms of 0.7 time as at 30 June 2004, as compared to the global industry average.
MISC enjoys exceptional financial flexibility, in the light of its substantial cash balance; its 62.44% ownership by PETRONAS; and superior access to capital markets (both local and international). Furthermore, the US Dollar denominated shipping revenue provides a natural hedge against exchange rate volatility in relation to the group’s sizeable foreign currency debt obligations.