RAM Ratings has affirmed the rating of TIME dotCom Berhad's (TIME or the Group) RM1 bil Islamic Medium-Term Notes Programme (2017/2037) at AA2/Stable. 

The rating is premised on TIME's solid operational performance and resilient financial profile. TIME's strategic focus on high-density, high-rise buildings has proven to yield better margins and augment its customer base quicker. As such, the Group's revenue and operating profit before depreciation, interest and tax stayed on an uptrend. Notwithstanding its capital-intensive business, TIME has generated positive free operating cash flow and been in a net cash position since 2014. 

On 20 April 2023, TIME divested its data centre business to DigitalBridge Group, Inc, keeping only a 30% stake in AIMS Data Centre (Thailand) Ltd and AIMS Data Centre Holding Sdn Bhd. One-off disposal gains totalling RM2.3 bil will heavily boost its bottom line this year, with TIME retaining RM1 bil of proceeds for reinvestments. For subsequent years, the earnings loss from the AIMS stake divestment is expected to be manageable at 8% of the Group's net profit. With a sizeable cash pile post-divestment, TIME's superior liquidity and credit metrics remain unaffected even under our stressed cashflow analysis of hefty capital expenditure and investment outflows, alongside moderate revenue growth.

The evolving technological landscape might present a risk to the Group. The rollout of the 5G network could hinder demand for fixed broadband in the longer term if cellular players are able to offer greater speed and connectivity at lower prices. In any case, we do not expect the criticality of TIME's fibre network to be impacted overnight.  

 

Analytical contacts
Chu Jia Ying
(603) 3385 2519
[email protected]

Davinder Kaur Gill
(603) 3385 2525
[email protected]

Media contact
Sakinah Arifin
(603) 3385 2500
[email protected]

 

The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch1