MARC Ratings has affirmed its AA-IS rating on Malaysia Marine and Heavy Engineering Holdings Berhad's (MHB) RM1.0 billion Sukuk Murabahah Programme, with the outlook revised to positive from stable.

The positive outlook reflects MHB's strengthened business profile, supported by a sustained high order book over the past four years, improved margins following its revised contracting strategy, and demonstrated resilience to market disruptions, including pandemic-related supply chain challenges.The rating remains underpinned by MHB's established track record in offshore fabrication and marine repair, as well as the scale of its contracted business. These strengths are moderated by its exposure to the cyclical nature of the oil and gas (O&G) sector.

The rating incorporates a one-notch uplift from MHB's standalone profile, reflecting its association with the Petroliam Nasional Berhad (PETRONAS) group and expectations of continued support from the group. PETRONAS holds an indirect interest in MHB through its 51%-owned MISC Berhad, which owns 66.5% of MHB.

MHB has demonstrated a sustained ability to maintain a sizeable order book, of RM4.0 billion to RM6.0 billion over 2022-2025, compared with approximately RM2.0 billion in the pre-COVID period. As at end-March 2026, its order book stood at about RM4.7 billion, with the heavy engineering segment contributing 78%. In March 2026, the group further strengthened its heavy engineering portfolio with the award of an engineering, procurement, and construction contract of four wellhead platform (WHP) facilities for marginal field design platforms from PTTEP Sarawak Oil Limited and PTTEP HK Offshore Limited (collectively, PTTEP), subsidiaries of Thailand's national oil company, PTT Public Company Limited. The projects are located in Sarawak and form part of a broader agreement covering up to 11 WHPs, indicating potential for further contract awards from PTTEP. The operating environment remains supportive of order book reple