MARC Ratings has affirmed its rating of AA-IS on Penang Port Sdn Bhd's (PPSB) Islamic Medium-Term Notes Issuance Programme of up to RM1.0 billion. The outlook on the rating is stable.

PPSB's position as the key trade gateway port in northern Peninsular Malaysia, handling both container and conventional cargo, as well as its ability to generate steady cash flows remain key rating drivers. Like its sister ports, Penang Port benefits from a long-term concession agreement that runs through March 2055, and the operational synergies derived from being part of MMC Port Holdings Berhad. Moderating factors include the impact on throughput volumes arising from a global trade slowdown, partly from geopolitical developments, and some degree of customer concentration that has weighed on handling volume.

For 5M2025, lower revenue was recorded at RM201.0 million, reflecting lower handling volumes in both container and conventional segments. Container throughput declined by 6.4% y-o-y to 568,288 twentyfoot equivalent units (TEUs), mainly due to weaker imports of automotive parts and exports of solar panels. Conventional cargo throughput contracted by 9.3% y-o-y to 2.3 million MT, weighed down by reduced exports of break bulk cargoes and imports of other commodities. Going forward, throughput volume is expected to remain flat for the whole of 2025, with the full impact of the US tariff imposition on trade movements remaining uncertain. Penang Port also saw a decline in its cruise operations following the departure of a key customer. Passenger volume reduced to 294,490 in 5M2025 (5M2024: 593,759). Passenger traffic is anticipated to improve with the commencement of a new service in 2H2025.

Despite lower revenue, improved efficiency has contributed to some protection in debt coverage measures. At RM77.7 million, operating profit before interest, tax, depreciation and amortisation (OPBITDA) interest coverage remained commensurate with the rating at 2.8x in 5M2025. Borrowings r