Published: Monday December 24, 2012 MYT 6:23:00 PM
RAM Ratings assigns preliminary AAA rating to UMW’s proposed sukuk
KUALA LUMPUR: RAM Ratings has assigned a preliminary AAA long-term rating to UMW Holdings Bhd's proposed RM2 billion Islamic Medium-Term Notes Programme (2012/2027).
The rating has a stable outlook, it said in a statement today.
UMW is an investment holding company involved in the assembly and distribution of Toyota vehicles, trading of heavy and industrial equipment, provision of oil and gas (O&G) services, manufacture of automotive parts and distribution of lubricants.
“The rating predominantly reflects UMW's strong market position and solid financial profile,” RAM Rating said.
It said UMW exhibited a robust financial profile. Despite its increasing debt load arising from the expansion of its O&G division, its adjusted gearing ratio has not exceeded 0.52 times in the last five years, supported by strong retained earnings.
“Backed by its robust cash reserves, the group's net gearing ratio has been negligible.
"UMW also has a sturdy cashflow, generating more than RM1 billion of funds from operations (FFO) annually; this has translated into a robust average FFO debt cover of at least 0.45 times save for fiscal 2009 when its profit performance waned amidst the global financial crisis,” it said.
UMW, via 51 per cent-owned UMW Toyota Motor Sdn Bhd, distributes the Toyota marque that leads the non-national segment of the Malaysian automotive industry.
Toyota accounted for 14.49 per cent of the total industry volume as at end-2011 with the best-selling models like Vios, Camry, Hilux and Hiace, the most popular brands in their respective segments. - BERNAMA