ANNOUNCEMENT DETAILS

Stay updated on Malaysian bonds and sukuk.

ANNOUNCEMENT DATE
:
24-Jan-2022
CATEGORY
:
GREEN FINANCING
SUB-CATEGORY
:
GREEN FINANCING
TITLE
:
Cahya Mata Sarawak Berhad
ISSUER NAME
:
CAHYA MATA SARAWAK BERHAD
DESCRIPTION
:
CONTENT
:
RAM Ratings has reaffirmed the AA3/Stable rating of Cahya Mata Sarawak Berhad's (CMS or the Group) RM2.0 bil Islamic MTN Programme (2017/2037) as well as the Group's AA3/Stable/P1 corporate credit ratings. The reaffirmation reflects our expectation that CMS's operating performance will gradually improve as it directly benefits from the pick-up in Sarawak's construction activity. Accordingly, the Group's financial profile, particularly its cashflow debt coverage, is anticipated to improve steadily in the immediate two years to stay commensurate with its ratings. 

In the past year, CMS made major changes to the composition of its board and revamped its senior management lineup. This follows allegations of and investigations into governance-related issues involving a key board member and senior management personnel. While the probe into the board member found the allegations to be without basis, a special review on the financial management of past investments revealed governance gaps. These events raise concerns over the Group's governance risks and potential negative investor and market perceptions. 

We recognise positive remedial measures taken by the board to strengthen the Group's internal controls and risk management. Dato Sri Sulaiman Abdul Rahman B Abdul Taib, who helmed CMS from 1995 to 2008, now heads the heavily revamped key management team as Group Managing Director. The new management is focused on fortifying core businesses and steadying the Group as it emerges from the COVID-19 pandemic. 

The protracted pandemic and movement controls had greatly disrupted the progress and rollout of projects in the construction sector. As the sole cement manufacturer and key construction materials supplier in Sarawak, CMS was consequently severely impacted. Its top line fell to RM739.66 mil in FY Dec 2020, remaining subdued at RM572.93 mil for 9M FY Dec 2021 (FY Dec 2019: RM1,085.81 mil). The Group's pre-tax profit of RM225.44 mil for fiscal 2020 (fiscal 2019: RM
ATTACHMENT
:
SOURCE
:
BURSA