Monday, Apr 24, 2006
The affirmed ratings of A+(bg)ID/ MARC-1(bg)ID for Mulpha International Bhd’s (MIB) RM75.0 million Bank Guaranteed Murabahah Notes Issuance Facility (MUNIF) reflect the unconditional and irrevocable bank guarantees provided by AmMerchant Bank Berhad and Southern Bank Berhad; whilst the affirmed ratings of AID/ MARC-2ID for MIB’s RM25.0 million Murabahah Commercial Paper/ Medium Term Notes (CP/MTN) reflect the company’s sound financial position aided by the strong performance of its Australian and Hong Kong operations. This is, however, tempered by the vulnerability to adverse developments in the property market and forex translation risks associated with its foreign operations.
MIB is a diversified group listed on the Main Board of Bursa Malaysia. Its principal activities include property development and investment, hotel ownership and operation, manufacturing, trading and provision of financial services. Its activities are geographically diversified with operations spread over several countries such as Malaysia, Australia, China, Hong Kong, Singapore and Vietnam.
MIB’s Australian operations, the main contributor to the Group’s revenue, is spearheaded by its wholly owned subsidiary, Mulpha Australia Limited (MAL). MAL has substantial interests in property development which included the purchase of Mulpha Hotel Investment (Australia) Pty Ltd (MHIA) in June 2004, giving it control over a stable of six hotels including 5-star luxury properties such as Hayman Island Resort, Intercontinental Hotel Sydney, and Melbourne Airport Hilton. Leveraging on its experience in the Australian property market, the company streamlined its investments by disposing two of the lower profiled hotels, the Novotel Century Sydney and the Sheraton Brisbane, and its Sydney Opera House car park concession, achieving lucrative gains while paring down borrowings. To further develop its interests in Australia, the company has positioned itself to take up a significant stake in property and retirement homes group FKP Limited a company listed on the Australian Stock Exchange.
Repayment for the facility is targeted to come from MIB’s Malaysian property developments, specifically its flagship development, Leisure Farm Resort (LFR) and its Bandar Seri Ehsan (BSE) development. LFR, located in Johor, is a high-end integrated residential cum resort development modelled on the group’s Sanctuary Cove development on the Gold Coast, Australia. It has an estimated gross development value (GDV) of RM2.26 billion and is situated within the growth area of Bandar Nusajaya, near the Second Link Highway and Port of Tanjung Pelepas (PTP), with a ready catchment area, good accessibility and modern infrastructure. In 2005, it was awarded FIABCI’s Malaysia Property Award under the Master Plan Development Category. It attracts demand from local residents, expatriates and Singaporeans. BSE is an integrated residential township project within the Multimedia Super Corridor in Sepang. Just 6 km away from Kuala Lumpur International Airport (KLIA), it has an estimated GDV of RM2.1 billion. The take up of its launched phases has been good, aided by the affordable pricing strategy which has been adopted for the development. First fixed charges on both the LFR and BSE developments, as well as cashflows from other sources within the MIB Group, offer added security for the issue.
MIB’s profit before tax decreased by 10.2% year-on-year in FYE 2004, despite increasing revenue, due to increased financing costs following the acquisition of MHIA in June 2004. The resultant increase in gearing has since moderated according to December 2005 unaudited results, which show total borrowings decreasing by 45% to RM896.1 million from RM1.6 billion in 2004. The improved gearing level of 0.42 times is well within the cap of 1 time. Profitability improved significantly from RM95.09 million in 2004 to RM358.3 million in 2005 due to gains from the disposal of a hotel and a car park in Australia, the gain on the dilution of interest in Mulpha Norwest Ltd and the lower financing costs from the reduced borrowings after the asset-disposals.
MIB is a diversified group listed on the Main Board of Bursa Malaysia. Its principal activities include property development and investment, hotel ownership and operation, manufacturing, trading and provision of financial services. Its activities are geographically diversified with operations spread over several countries such as Malaysia, Australia, China, Hong Kong, Singapore and Vietnam.
MIB’s Australian operations, the main contributor to the Group’s revenue, is spearheaded by its wholly owned subsidiary, Mulpha Australia Limited (MAL). MAL has substantial interests in property development which included the purchase of Mulpha Hotel Investment (Australia) Pty Ltd (MHIA) in June 2004, giving it control over a stable of six hotels including 5-star luxury properties such as Hayman Island Resort, Intercontinental Hotel Sydney, and Melbourne Airport Hilton. Leveraging on its experience in the Australian property market, the company streamlined its investments by disposing two of the lower profiled hotels, the Novotel Century Sydney and the Sheraton Brisbane, and its Sydney Opera House car park concession, achieving lucrative gains while paring down borrowings. To further develop its interests in Australia, the company has positioned itself to take up a significant stake in property and retirement homes group FKP Limited a company listed on the Australian Stock Exchange.
Repayment for the facility is targeted to come from MIB’s Malaysian property developments, specifically its flagship development, Leisure Farm Resort (LFR) and its Bandar Seri Ehsan (BSE) development. LFR, located in Johor, is a high-end integrated residential cum resort development modelled on the group’s Sanctuary Cove development on the Gold Coast, Australia. It has an estimated gross development value (GDV) of RM2.26 billion and is situated within the growth area of Bandar Nusajaya, near the Second Link Highway and Port of Tanjung Pelepas (PTP), with a ready catchment area, good accessibility and modern infrastructure. In 2005, it was awarded FIABCI’s Malaysia Property Award under the Master Plan Development Category. It attracts demand from local residents, expatriates and Singaporeans. BSE is an integrated residential township project within the Multimedia Super Corridor in Sepang. Just 6 km away from Kuala Lumpur International Airport (KLIA), it has an estimated GDV of RM2.1 billion. The take up of its launched phases has been good, aided by the affordable pricing strategy which has been adopted for the development. First fixed charges on both the LFR and BSE developments, as well as cashflows from other sources within the MIB Group, offer added security for the issue.
MIB’s profit before tax decreased by 10.2% year-on-year in FYE 2004, despite increasing revenue, due to increased financing costs following the acquisition of MHIA in June 2004. The resultant increase in gearing has since moderated according to December 2005 unaudited results, which show total borrowings decreasing by 45% to RM896.1 million from RM1.6 billion in 2004. The improved gearing level of 0.42 times is well within the cap of 1 time. Profitability improved significantly from RM95.09 million in 2004 to RM358.3 million in 2005 due to gains from the disposal of a hotel and a car park in Australia, the gain on the dilution of interest in Mulpha Norwest Ltd and the lower financing costs from the reduced borrowings after the asset-disposals.