WCT Engineering Berhad’s (WCT) proposed additional indebtedness, primarily for its construction projects in Qatar will result in a higher debt level, rising from 0.7 times in FY2004 to 0.9 times currently. Whilst this level is marginally high for the current ratings of A+ID for long term and MARC-1ID for short term, it is moderated by WCT’s excellent record on its overseas projects to-date, expected revenue generation on the overseas contracts, its experienced Joint Venture Partners and the company’s hands on approach in managing these projects.
As at January 2006, WCT’s total outstanding order book stands at RM1.4 billion of which 49% comprise overseas projects. This is sufficient to sustain its construction activities over the next two to three years. The company’s on-going overseas projects include The Dukhan Highway and New Doha International Airport in Qatar and The Durrat Al-Bahrain Highway Link in Bahrain.
Going forward the management expects to further develop their footing in the Middle East, especially in highly rated sovereigns such as Bahrain and Qatar, focusing particularly on public funded projects, given their stable operating environment. MARC will continue to monitor WCT’s increasing involvement in overseas projects and their effect on the company’s risk profile.