Wednesday, Dec 17, 2003
Kwantas Corporation Berhad’s (KCB) rating has been reaffirmed at A+ID reflecting the integrated nature of the Group’s palm oil operations; its expanding activities namely, the commercialization of renewable bio-mass energy and establishment of operations in China; and the Group’s relatively strong financial profile.
KCB Group’s credit strength is drawn from the integrated nature of its operations, which ranges from palm oil plantation, milling, kernel crushing, refinery, bulking installation and bio-mass energy. Sales of refinery products together with milling made up over 90% of its total revenue. Revenue has been on an increasing trend over the past four fiscal years, reaching RM1.3 billion in FY2003. Growth in the recent fiscal year can be attributed to the higher prices of crude palm oil and palm kernel as well as higher processing margins from the refined products due to a more efficient operation.
The average FFB output of the Group’s 8,002.6 hectares of planted area in Lahad Datu, Sabah have generally outperformed the industry, reflecting the high proportion of matured/prime age trees in its estates. KCB has two palm oil mills located in Lahad Datu, Sabah with a total processing capacity of 180 metric tonne (MT) per hour. The mills’ average oil extraction rate of 21.53% was also higher than the industry average of 19.9% (2002). Within the Lahad Datu area, KCB’s refinery plant possesses the highest installed capacity of 2,400 MT per day.
In addition to the main palm oil-based activities, the Group has its own bulking installation facility for storage, handling and transportation/exporting refined products to overseas destinations. The Group’s 9.8 MW bio-mass power plant, commenced operations in early 2003, and the Group is presently in advanced negotiations with Sabah Electricity Sdn Bhd for the sale of electricity to the latter.
The Group’s bulking installation facility in the Guangzhou free trade area in China is now operational. The Group is also currently in the process of constructing its refinery, shortening and soap noodle plant as well as another bulking installation facility in the free trade area of Zhang Jia Gang. The expansion plans are expected to be independently funded by the respective operating subsidiaries.
KCB’s profitability measures in FY2003 showed marked improvement aided by the higher crude palm oil prices, improvement in FFB yield coupled with improved margins on refined products. Debt servicing capacity, consequently strengthened on the back of the larger net cash flow from operations. KCB’s debt leverage is moderate, averaging 0.7 times over the past five years.
KCB Group’s credit strength is drawn from the integrated nature of its operations, which ranges from palm oil plantation, milling, kernel crushing, refinery, bulking installation and bio-mass energy. Sales of refinery products together with milling made up over 90% of its total revenue. Revenue has been on an increasing trend over the past four fiscal years, reaching RM1.3 billion in FY2003. Growth in the recent fiscal year can be attributed to the higher prices of crude palm oil and palm kernel as well as higher processing margins from the refined products due to a more efficient operation.
The average FFB output of the Group’s 8,002.6 hectares of planted area in Lahad Datu, Sabah have generally outperformed the industry, reflecting the high proportion of matured/prime age trees in its estates. KCB has two palm oil mills located in Lahad Datu, Sabah with a total processing capacity of 180 metric tonne (MT) per hour. The mills’ average oil extraction rate of 21.53% was also higher than the industry average of 19.9% (2002). Within the Lahad Datu area, KCB’s refinery plant possesses the highest installed capacity of 2,400 MT per day.
In addition to the main palm oil-based activities, the Group has its own bulking installation facility for storage, handling and transportation/exporting refined products to overseas destinations. The Group’s 9.8 MW bio-mass power plant, commenced operations in early 2003, and the Group is presently in advanced negotiations with Sabah Electricity Sdn Bhd for the sale of electricity to the latter.
The Group’s bulking installation facility in the Guangzhou free trade area in China is now operational. The Group is also currently in the process of constructing its refinery, shortening and soap noodle plant as well as another bulking installation facility in the free trade area of Zhang Jia Gang. The expansion plans are expected to be independently funded by the respective operating subsidiaries.
KCB’s profitability measures in FY2003 showed marked improvement aided by the higher crude palm oil prices, improvement in FFB yield coupled with improved margins on refined products. Debt servicing capacity, consequently strengthened on the back of the larger net cash flow from operations. KCB’s debt leverage is moderate, averaging 0.7 times over the past five years.