Wednesday, Dec 17, 2003
MARC has reaffirmed the rating of Kelang Multi Terminal Sdn Bhd’s (KMT) Floating Rate Notes (FRN) with a nominal value of RM350 million at A+ (A plus). The reaffirmation of the rating reflects KMT’s strong business fundamentals and operational efficiency and continued growth in container and conventional throughput. Offsetting this is the high, but manageable debt leverage level and the stiff competition within the industry.
KMT is the operator of Westport; a deep water, state-of-the-art port located in Port Klang catering to modern fifth generation vessels. With a capacity of 2.8 million twenty-foot equivalent units (TEUs) for container cargoes and 13.0 million tonnes per annum for conventional cargoes, Westport is one of the largest terminals in Malaysia.
KMT’s revenue and profitability measures continued on an upward trend, driven by a significant increase in container volume coupled with stable growth in conventional throughput. In 2002, Westport handled a total container throughput of over 2 million TEUs; around two-thirds of which represented transhipment boxes. In the near to medium term, MARC believes that the transhipment business will continue to grow against the backdrop of a recovery in the global economy.
Facilitating the growth in container volume is the port’s low tariffs, wide feeder coverage, 17 berths, large yard capacity, state-of-the-art terminal facilities, information technology support services and good infrastructure support. Westport’s productivity measures are in line, and in some cases, better than fastport standards. Westport’s strategic alliance with Hutchison Port Holdings, a major shareholder, is expected to bring benefits including technology transfer and access to the latter’s IT systems. 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, which account for the bulk of the port’s revenue.
As evidence of the port’s operating efficiency, KMT’s operating profit margin has hovered above 30% over the past four fiscal years. Debt servicing capacity continued to strengthen, backed by the growing cash flow from operations. During the period under review, growth in shareholders’ funds has helped to reduce KMT’s debt leverage to 2.95x (FY2001: 3.97x), despite the increase in debt obligations.
KMT is the operator of Westport; a deep water, state-of-the-art port located in Port Klang catering to modern fifth generation vessels. With a capacity of 2.8 million twenty-foot equivalent units (TEUs) for container cargoes and 13.0 million tonnes per annum for conventional cargoes, Westport is one of the largest terminals in Malaysia.
KMT’s revenue and profitability measures continued on an upward trend, driven by a significant increase in container volume coupled with stable growth in conventional throughput. In 2002, Westport handled a total container throughput of over 2 million TEUs; around two-thirds of which represented transhipment boxes. In the near to medium term, MARC believes that the transhipment business will continue to grow against the backdrop of a recovery in the global economy.
Facilitating the growth in container volume is the port’s low tariffs, wide feeder coverage, 17 berths, large yard capacity, state-of-the-art terminal facilities, information technology support services and good infrastructure support. Westport’s productivity measures are in line, and in some cases, better than fastport standards. Westport’s strategic alliance with Hutchison Port Holdings, a major shareholder, is expected to bring benefits including technology transfer and access to the latter’s IT systems. 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, which account for the bulk of the port’s revenue.
As evidence of the port’s operating efficiency, KMT’s operating profit margin has hovered above 30% over the past four fiscal years. Debt servicing capacity continued to strengthen, backed by the growing cash flow from operations. During the period under review, growth in shareholders’ funds has helped to reduce KMT’s debt leverage to 2.95x (FY2001: 3.97x), despite the increase in debt obligations.