[RAM] RAM Ratings affirms AA3/P1 ratings of Bermaz's Islamic programmes

RAM Ratings has affirmed the respective P1 and AA₃/Stable ratings of Bermaz Auto Berhad’s (Bermaz or the Group) Islamic Commercial Papers (ICP) Programme (2020/2027) and Islamic Medium-Term Notes (IMTN) Programme. The two issues have a combined limit of RM500 mil. 

Bermaz’s issue ratings are supported by the Group’s established niche in the affordable premium segment as well as its robust financial profile and cashflow generation ability. These factors will allow it to ride out the impact of slower sales due to competition from new Chinese entrants and an anticipated moderation of future total industry volume (TIV). 

The Group’s total debt rose to RM371.46 mil on account of higher working capital requirements as at end-October 2024, translating to a higher gearing ratio of 0.45 times from 0.17 times as at end-April 2024. This, combined with weaker earnings in 1H FY Apr 2025, led to weaker annualised funds from operations debt coverage of 0.50 times, albeit still considered strong for its rating. Bermaz remains in a net cash position supported by cash balances of RM458.34 mil (FY Apr 2024: RM364.82 mil), and amply covers its short-term obligations. Its solid financial position and good access to bank facilities and capital markets will keep the Group resilient during disruptive periods over the near term.

Constraining the ratings are franchise renewal risk, the increasingly competitive and rapidly evolving business environment, and the Group’s vulnerability to economic cycles and changes in regulatory policy. 


Analytical contact
Thong Mun Wai
(603) 3385 2522
munwai@ram.com.my

Media contact
Sakinah Arifin
(603) 3385 2500
sakinah@ram.com.my