Monday, Dec 30, 2002
Malaysian Rating Corporation Berhad has reaffirmed the rating of AAAID (Triple AAA, Islamic Debt) for Petronas Assets Sdn Bhd’s Bai Al-Dayn Notes Issuance Facility with a nominal value of RM242 million. The reaffirmation of the rating reflects the credit strength of Petroliam Nasional Berhad (“PETRONAS”), the holding company of Petronas Assets Sdn Bhd (PAssets), user of PETROSAINS The Discovery Centre (the Assets), and the obligor of the Promissory Notes (PNs). Payments arising from the PNs form the primary source of repayment of the Notes.
PETRONAS’ credit strength is superior and is drawn from its robust cash flow generation that is supported by a favourable production profile, strong profitability measures, sound capital structure and its significant role in the Malaysian economy. For FY March 2002, PETRONAS reported a turnover of RM67.2 billion compared to RM73.4 billion in the previous corresponding period. Pre-tax profit, meanwhile, fell to RM24.3 billion from RM29.0 billion previously. This was mainly due to the global economic slowdown which was further aggravated by the September 11 event. Nonetheless, liquidity position remained strong, backed by RM43.9 billion (FY2001: RM45.1 billion) of liquid assets, that more than sufficiently covered the group’s current liabilities.
PAssets is a wholly owned subsidiary of PETRONAS and is in the business of owning and leasing of assets. The Company has acquired and subsequently granted an exclusive right of use of the Assets to PETRONAS for an indefinite period. In consideration for this exclusive right, PETRONAS has issued PNs, evidencing its obligation to make rental payments.
For financial year ended 31 March 2002, PAssets turned in pre-tax profit of RM14.8 million on turnover of RM120.2 million (FY2001:RM15.3 million pre-tax profit; RM50.0 million turnover). The company’s operating margin is considered strong at 20.2%. As operating and maintenance costs are borne directly by PETRONAS, the company was able to keep its operating cost at a minimum level. PAsset’s strong finance service capacity is derived from the stability and predictability of its cash flows from the rental payments made by PETRONAS.
The debt leverage is exceptionally high as the Assets are fully funded by external borrowings. Subsequent to the issuance of the two Islamic debt facilities, Bai Al-Dayn Notes Issuance Facility and Al-Murabahah Commercial Papers/Medium Term Notes Programme, PAsset’s debt leverage soared to 12.75x as at 31 March 2002 (FY2001:Nil).
The outstanding limit of the Bai Al-Dayn Notes Issuance Facility currently stands at RM242 million following the first redemption of RM40 million in May 2002. Going forward, gearing is expected to decline in tandem with the gradual repayment of the Notes. Financial flexibility is strong with the support of parent company, PETRONAS.
PETRONAS’ credit strength is superior and is drawn from its robust cash flow generation that is supported by a favourable production profile, strong profitability measures, sound capital structure and its significant role in the Malaysian economy. For FY March 2002, PETRONAS reported a turnover of RM67.2 billion compared to RM73.4 billion in the previous corresponding period. Pre-tax profit, meanwhile, fell to RM24.3 billion from RM29.0 billion previously. This was mainly due to the global economic slowdown which was further aggravated by the September 11 event. Nonetheless, liquidity position remained strong, backed by RM43.9 billion (FY2001: RM45.1 billion) of liquid assets, that more than sufficiently covered the group’s current liabilities.
PAssets is a wholly owned subsidiary of PETRONAS and is in the business of owning and leasing of assets. The Company has acquired and subsequently granted an exclusive right of use of the Assets to PETRONAS for an indefinite period. In consideration for this exclusive right, PETRONAS has issued PNs, evidencing its obligation to make rental payments.
For financial year ended 31 March 2002, PAssets turned in pre-tax profit of RM14.8 million on turnover of RM120.2 million (FY2001:RM15.3 million pre-tax profit; RM50.0 million turnover). The company’s operating margin is considered strong at 20.2%. As operating and maintenance costs are borne directly by PETRONAS, the company was able to keep its operating cost at a minimum level. PAsset’s strong finance service capacity is derived from the stability and predictability of its cash flows from the rental payments made by PETRONAS.
The debt leverage is exceptionally high as the Assets are fully funded by external borrowings. Subsequent to the issuance of the two Islamic debt facilities, Bai Al-Dayn Notes Issuance Facility and Al-Murabahah Commercial Papers/Medium Term Notes Programme, PAsset’s debt leverage soared to 12.75x as at 31 March 2002 (FY2001:Nil).
The outstanding limit of the Bai Al-Dayn Notes Issuance Facility currently stands at RM242 million following the first redemption of RM40 million in May 2002. Going forward, gearing is expected to decline in tandem with the gradual repayment of the Notes. Financial flexibility is strong with the support of parent company, PETRONAS.