MARC RATINGS REVISES JB COCOA'S OUTLOOK TO POSITIVE

MARC Ratings has revised the rating outlook on JB Cocoa Sdn Bhd's RM500.0 million Islamic Medium Term Notes (Sukuk Wakalah) Programme to positive from stable. The rating on the Sukuk Wakalah programme has been affirmed at A+IS.

JB Cocoa is a key wholly-owned manufacturing subsidiary of Singapore-based JB Foods Limited. The parent company has provided a corporate guarantee on JB Cocoa's Sukuk Wakalah programme. Accordingly, the rating assessment considers the consolidated credit profile of JB Foods in view of the operational and financial linkages between companies within the group.

The outlook revision reflects MARC Ratings' expectation that JB Cocoa will sustain its earnings strength while continuing to manage the effects of cocoa price volatility on working capital and liquidity. The group has demonstrated resilience through the recent period of exceptionally high and volatile cocoa prices, maintaining disciplined risk management while delivering stronger profitability and materially improved earnings leverage. The rating affirmation reflects JB Foods' established position as one of the larger cocoa processors by grinding capacity, underpinned by its long operating track record, experienced management team, and established relationships with major global confectionery and food manufacturers. Its production footprint in Malaysia and Indonesia provides access to diversified end markets, while the upcoming Ivory Coast facility is expected to strengthen origin-country sourcing, improve geographic diversification and enhance the group's ability to serve European and US customers more efficiently. The additional 60,000MT capacity will increase total grinding capacity to 270,000MT. The facility is also expected to reduce logistics lead times to key western markets and improve the marketability of West African cocoa products in Europe under favourable import tax arrangements.

Earnings strengthened materially1