MARC has reaffirmed Bintang Bulk Mover Sdn Bhd’s (BBM) RM50 million 5 year secured serial bonds rating at A- (A minus) with stable outlook, underpinned by the Group’s steady operating performance and stable revenue stream vis-à-vis its long term cement transportation contracts with Lafarge Malayan Cement Bhd (LMCB), the largest local cement manufacturer. The affirmation also reflects the Group’s increasingly integrated operations, through the provision of other transportation services such as inland containerized haulage and warehousing activities.  Moderating factors however include BBM’s exposure to the cyclical developments affecting the cement industry as well as intense competition within the general haulage industry.     

The Group’s revenue has been on an increasing trend since FY2001, supported by strong contribution from its subsidiary, Agenda Wira Sdn Bhd, which provides container haulage services. Despite the 22% surged in revenue for FY2006, the Group recorded lower pre-tax profit of RM13.85 million (FY2005: RM16.3 million) attributable to higher operating costs coupled with the surge in diesel prices. Given the positive domestic economic environment and resilient export activities, the haulage volume is anticipated to remain buoyant in the short to medium term. Approximately 42% of the Group’s total revenue was derived from cement transportation whilst 48% generated from container haulage services in fiscal 2006.

BBM’s extensive fleet of tankers, prime movers and trucks have transformed the Group into one of the largest second-tier hauliers in the country. The cement haulage activities are expected to provide crucial support to the Group’s revenue and profitability levels based on the long term contracts while increasing contribution is expected from the container haulage activities. Moving forward, BBM Group will be positioning itself as an integrated logistic provider, offering additional synergistic business such as freight forwarding services.

Debt leverage position on consolidated basis was relatively high at 1.80 times in FY2006. Its debt-to-equity ratio, measured at company level however, stood at 1.36 times as at 28 February 2006; still within the covenanted level of 1.75 times as stipulated under the issue structure.

The Group’s CFO interest coverage ratio has shown further improvement in FY2006 to 5.23 times (FY2005: 5.01 times). It is expected that BBM’s cash flow position will continue to be supported by the stable income stream from its long term contracts mainly with LMCB.