[MARC] MARC Ratings affirms AA-IS rating on MMC Port Holdings’ sukuk

MARC Ratings has affirmed its rating of AA-IS on MMC Port Holdings Berhad’s RM1.0 billion Sukuk Murabahah Programme with a stable outlook.

The rating affirmation reflects the strong collective credit profile of port operators under MMC Port which continue to demonstrate robust operational track records and strong cash flow generation, enabling steady dividend upstreaming to meet the holding company’s financial commitments. The company’s financial flexibility, derived from its ownership of these well-established port assets, remains a key credit strength. Nonetheless, the rating also considers the potential vulnerability of the port operators’ performance to regional and global economic slowdown as well as ongoing geopolitical uncertainties.

MMC Port is a non-operating intermediate holding company of five key domestic port operators — Port of Tanjung Pelepas (PTP), Northport, Penang Port, Johor Port, and Tanjung Bruas Port — with an annual combined maximum container handling capacity of 24.1 million twenty-foot equivalent units (TEUs). With ports under its control positioned strategically along the Strait of Malacca, MMC Port ranks among the world’s top 10 global port operators, offering a mix of transshipment and gateway services under long-term concession arrangements.

In 2024, dividend income rose by 20% to RM658 million, largely attributed to higher contributions from Northport and Johor Port. The company continues to upstream the bulk of dividends it receives to its immediate parent, MMC Corporation Berhad. Accordingly, liquidity at the holding company has been modest, adequate to meet its profit payment obligations. The rating agency expects MMC Port to have sufficient liquidity by April 2027 when the first sukuk repayment of RM200 million of the outstanding RM1.0 billion sukuk is due.

Consolidated revenue and operating profit of RM1.9 billion and RM595.9 million in 5M2025 reflect the overall increase in throughput volume. Consolidated borrowings stood at RM5.4 billion, translating into gross and net debt-to-equity ratios of 0.9x and 0.6x as at end-May 2025. MMC Port has a planned capex of about RM2.3 billion for 2026, the bulk of which will be allocated to PTP (RM1.5 billion) and Northport (RM476 million). MARC Ratings notes that the port subsidiaries plan to fund their capex at the subsidiary level and meet the financial obligations from their operating cash flows and bank borrowings, alleviating the need for funding support from the holding company.

Aisyah Husna Adlan, +603-2717 2909/ husna@marc.com.my
Vanessa Leong, +603-2717 2931/ xinyue@marc.com.my
Taufiq Kamal, +603-2717 2951/ taufiq@marc.com.my