Wednesday, Nov 23, 2005
MARC has affirmed KFC Holdings (Malaysia) Bhd’s (“KFCH”) RM300.00 million Islamic Notes Issuance Facility (INIF) rating of A+ID, with developing outlook. KFCH is an investment holding company with subsidiaries involved in restaurant operations, convenience food store chain, integrated poultry operations and other related ancillary operations.
The ratings outlook reflects the uncertainty posed by the ongoing boardroom tussle at QSR Brands Bhd (“QSR”), its largest shareholder. However, the tussle is restricted only at the shareholders level and has not affected the daily operations of the Company. MARC is informed that Yum! Restaurants International (“Yum”) is fully aware of the developments of the company.
KFCH’s revenue, continued on an upward trend registering growth of 2.2% in FY2004 as compared to the previous year. Total revenue of RM1.41 billion registered during the year was driven by improved sales at KFC restaurants and its integrated poultry division, which contributed 70.6% and 20.1% respectively. Debt servicing capacity remains strong with the debt service coverage ratio registering 2.55 times in 2004. KFCH’s debt leverage level also improved from 1.02 times in 2003 to 0.83 times in 2004, and is well below the 2:1 debt to equity cap under the issue structure. KFCH delivered a solid set of results for the first half of FY2005, with revenue registered at RM723.2 million, up by 3.1% and operating profit of RM58.7 million, up by 108.4% as compared to the first half of FY2004.
KFCH’s sturdy credit profile remains intact. The developing rating outlook indicates the uncertainty about future ownership and its implications for continuance of the franchise agreement, and that the rating assigned could be upgraded, downgraded or be maintained, depending upon the resolution of the above.
The ratings outlook reflects the uncertainty posed by the ongoing boardroom tussle at QSR Brands Bhd (“QSR”), its largest shareholder. However, the tussle is restricted only at the shareholders level and has not affected the daily operations of the Company. MARC is informed that Yum! Restaurants International (“Yum”) is fully aware of the developments of the company.
KFCH’s revenue, continued on an upward trend registering growth of 2.2% in FY2004 as compared to the previous year. Total revenue of RM1.41 billion registered during the year was driven by improved sales at KFC restaurants and its integrated poultry division, which contributed 70.6% and 20.1% respectively. Debt servicing capacity remains strong with the debt service coverage ratio registering 2.55 times in 2004. KFCH’s debt leverage level also improved from 1.02 times in 2003 to 0.83 times in 2004, and is well below the 2:1 debt to equity cap under the issue structure. KFCH delivered a solid set of results for the first half of FY2005, with revenue registered at RM723.2 million, up by 3.1% and operating profit of RM58.7 million, up by 108.4% as compared to the first half of FY2004.
KFCH’s sturdy credit profile remains intact. The developing rating outlook indicates the uncertainty about future ownership and its implications for continuance of the franchise agreement, and that the rating assigned could be upgraded, downgraded or be maintained, depending upon the resolution of the above.