Wednesday, Oct 29, 2003
Puncak Alam Housing Sdn Bhd’s (PAH) rating has been upgraded to AID (single A, Islamic Debt), in view of the strength of the underlying issue structure, the advanced stage of completion for Phase II and Phase III of the Bandar Baru Puncak Alam project which have been earmarked for the redemption of the issue, and the remaining billings to date which more than covers the balance of funds to be accumulated under the Sinking Fund Account (SFA). The rating, however, continues to be moderated by the vulnerability of the projects to adverse developments in the local property market.
PAH is principally involved in property development. The portion of Phase II and Phase III that is assigned to the BaIDS issue covers 468 acres of Bandar Baru Puncak Alam, the Company’s maiden project. Sales performance for the two phases have been fairly impressive with current average take-up rate of 95.9% and 98.0% respectively. The aggregate amount billed for both phases as at 30 September 2003 stood at RM544.09 million, with remaining billings of RM54.01 million, representing 11.08 times the size of the outstanding BaIDS issue [after netting-off the SFA balance to date]. This substantially mitigates liquidity and security risks.
Only three out of fifteen zones/sub-phases remain to be completed and handed over. Phase II - Zone A and Phase III B-D are expected to be completed by the end of October 2003 whilst Phase III B-F is scheduled to be handed-over by February 2004. The first three instalments amounting to RM32.00 million have been paid on their respective maturity dates. As at 30 September 2003, the balance in the SFA stood at RM45.164 million (representing an 87.3% cash coverage of the BaIDS), slightly above the required cumulative balance of RM45.125 million. The final maturity date of the BaIDS is in December 2003.
Given the recent completion of the Shah Alam – Puncak Alam Highway and the ongoing Guthrie Corridor Expressway, as well as competitive pricing, demand for properties in the area is expected to improve. Credit risk is spread over a large number of purchasers, with 81.0% of total take up value secured through end-financiers. Construction risk for the remaining properties is also expected to be minimal.
PAH registered a 15.4% decline in revenue, and a 47.8% fall in pre-tax profit to RM181.45 million and RM1.33 million in FY2002 respectively, following the completion of the joint venture projects with Road Builders Group in FY2001. However, with excellent take-up rates to date and future property launches, PAH’s revenue stream is expected to be sustainable in the near-to-medium term. PAH’s gearing was at 1.6x in FY2002, well within the covenanted debt-to-equity cap of 2.0x. Net cash flow from operations rose sharply to RM45.63 million in FY2002, resulting in the improved cash flow protection measures.
PAH is principally involved in property development. The portion of Phase II and Phase III that is assigned to the BaIDS issue covers 468 acres of Bandar Baru Puncak Alam, the Company’s maiden project. Sales performance for the two phases have been fairly impressive with current average take-up rate of 95.9% and 98.0% respectively. The aggregate amount billed for both phases as at 30 September 2003 stood at RM544.09 million, with remaining billings of RM54.01 million, representing 11.08 times the size of the outstanding BaIDS issue [after netting-off the SFA balance to date]. This substantially mitigates liquidity and security risks.
Only three out of fifteen zones/sub-phases remain to be completed and handed over. Phase II - Zone A and Phase III B-D are expected to be completed by the end of October 2003 whilst Phase III B-F is scheduled to be handed-over by February 2004. The first three instalments amounting to RM32.00 million have been paid on their respective maturity dates. As at 30 September 2003, the balance in the SFA stood at RM45.164 million (representing an 87.3% cash coverage of the BaIDS), slightly above the required cumulative balance of RM45.125 million. The final maturity date of the BaIDS is in December 2003.
Given the recent completion of the Shah Alam – Puncak Alam Highway and the ongoing Guthrie Corridor Expressway, as well as competitive pricing, demand for properties in the area is expected to improve. Credit risk is spread over a large number of purchasers, with 81.0% of total take up value secured through end-financiers. Construction risk for the remaining properties is also expected to be minimal.
PAH registered a 15.4% decline in revenue, and a 47.8% fall in pre-tax profit to RM181.45 million and RM1.33 million in FY2002 respectively, following the completion of the joint venture projects with Road Builders Group in FY2001. However, with excellent take-up rates to date and future property launches, PAH’s revenue stream is expected to be sustainable in the near-to-medium term. PAH’s gearing was at 1.6x in FY2002, well within the covenanted debt-to-equity cap of 2.0x. Net cash flow from operations rose sharply to RM45.63 million in FY2002, resulting in the improved cash flow protection measures.