Tuesday, Jun 10, 2003
MARC has reaffirmed the rating of MARC-1ID/AAAID assigned to Malaysia International Shipping Corporation Berhad’s (MISC) RM1.5 billion Murabahah Commercial Paper/Medium-Term Notes Programme (2000/2005). The affirmation of the ratings reflect MISC’s solid operating fundamentals, in particular the Liquefied Natural Gas (LNG) shipping segment, that provides the company with a stable and recurrent income to withstand a more challenging market environment in respect of its liner and dry bulk segments. Other supporting factors include MISC’s strategic position in the Malaysian shipping industry, its moderate financial policy, exceptional financial flexibility, and the strong support of its majority shareholder, Petroliam Nasional Berhad (PETRONAS).
MISC will continue to focus and develop its profitable LNG and Petroleum business. Towards this end, MISC has increased its LNG fleet size to 15 vessels with 2 new LNG vessels delivered during FYE March 2003 and a further 6 LNG vessels to be delivered between 2003 and 2006. As the sole transporter of LNG from Malaysia and the world’s single largest owner and operator of LNG tankers, MISC is in a favourable position to benefit from the growing demand for LNG transportation.
On 29 April 2003, MISC announced the acquisition of American Eagle Tankers Inc. Ltd. (AET), a unit of Singapore-based Neptune Orient Lines Ltd. for USD445.0 million, which is likely to be funded through a combination of bridging finance and MISC’s own internal funds. Through this acquisition, MISC will possess the second largest owner-operated Aframax tankers fleet in the world.
The group’s pre-tax profit for FYE March 2003 was RM1.3 billion (FY2002: RM1.4 billion) on the back of RM5.4 billion (FY2002: RM5.5 billion) in revenue. The slight deterioration from the previous financial year was mainly due to the protracted global economic slowdown and uncertainties resulting in over-capacity and depressed freight rates in most shipping sectors. Going forward, concentrated efforts are being made to strengthen MISC’s position in the energy-based transportation sector.
The group’s strong cash flow position has strengthened further over the last three years, underpinned by the relatively stable US dollar denominated charter revenue stream from the LNG business. MISC’s gearing is considered low by shipping industry standards with its debt leverage trending downwards to 0.44 time as at end FY2003 (FY2002: 0.51x; FY2001: 0.69x). Should MISC decide to fund AET’s acquisition entirely by debt, MARC expects its pro-forma debt-to-equity ratio to increase to a manageable level of approximately 0.75 times.
MISC will continue to focus and develop its profitable LNG and Petroleum business. Towards this end, MISC has increased its LNG fleet size to 15 vessels with 2 new LNG vessels delivered during FYE March 2003 and a further 6 LNG vessels to be delivered between 2003 and 2006. As the sole transporter of LNG from Malaysia and the world’s single largest owner and operator of LNG tankers, MISC is in a favourable position to benefit from the growing demand for LNG transportation.
On 29 April 2003, MISC announced the acquisition of American Eagle Tankers Inc. Ltd. (AET), a unit of Singapore-based Neptune Orient Lines Ltd. for USD445.0 million, which is likely to be funded through a combination of bridging finance and MISC’s own internal funds. Through this acquisition, MISC will possess the second largest owner-operated Aframax tankers fleet in the world.
The group’s pre-tax profit for FYE March 2003 was RM1.3 billion (FY2002: RM1.4 billion) on the back of RM5.4 billion (FY2002: RM5.5 billion) in revenue. The slight deterioration from the previous financial year was mainly due to the protracted global economic slowdown and uncertainties resulting in over-capacity and depressed freight rates in most shipping sectors. Going forward, concentrated efforts are being made to strengthen MISC’s position in the energy-based transportation sector.
The group’s strong cash flow position has strengthened further over the last three years, underpinned by the relatively stable US dollar denominated charter revenue stream from the LNG business. MISC’s gearing is considered low by shipping industry standards with its debt leverage trending downwards to 0.44 time as at end FY2003 (FY2002: 0.51x; FY2001: 0.69x). Should MISC decide to fund AET’s acquisition entirely by debt, MARC expects its pro-forma debt-to-equity ratio to increase to a manageable level of approximately 0.75 times.