KUCHING: RAM Ratings has reaffirmed the
AA1/Stable rating of Sarawak Energy Bhd’s (SEB) sukuk musyarakah programme of
up to RM15 billion (2011/2036).
According to a
press statement, the reaffirmation of the rating reflects the strong support
that SEB continues to enjoy from the Sarawak State and Federal Governments,
given its pivotal role in the Sarawak Corridor of Renewable
Energy (SCORE).
RAM viewed that the
group to benefit from a “very high” likelihood of support from the Sarawak
State Government in the event of financial distress, based on its rating
methodology for government-linked entities. Notably, SEB’s financial profile
remained in line with the rating agency’s expectations.
The rating is
moderated by the group’s weak balance sheet and debt-servicing ability. In line
with its hefty capitak expenditure (capex) programme, SEB’s debt load stood at
RM6.1 billion as at end-of financial year 2013 (end-FY12 at RM6.28 billion).
“As a result of the
lower debt level, SEB’s adjusted gearing ratio improved slightly to 3.44 times
(FY12 at 3.71 times) while its adjusted funds from operations debt coverage
(FFODC) remained relatively unchanged at 0.07 times (FY12 at 0.06 times).
“Its adjusted
gearing ratio is projected to peak at 3.65 times in fiscal 2014 and its
adjusted FFODC to improve slightly, averaging around 0.13 times between fiscal
2014 and 2018 as the hroup manages its costs and capex in accordance with its
revised expectation of slower pace of customer demand,” it said.
RAM Ratings pointed
out, “SEB remains exposed to demand risk, given the progressive take-up of
power by SCORE customers relative to its immediate capacity expansion with the Bakun
(2,400-MW) and Murum (944-MW) hydro plants.
“We note that a
total of 2,100-MW of combined capacity has been met by committed demand from
firm SCORE and export customers.”
Elsewhere, it noted
SEB is inherently exposed to power-supply concentration risk as about 59 per
cent of its current power supply emanates from the Bakun plant, which is owned
by the Federal Government (via Sarawak Hidro Sdn Bhd).
“Reliance on Bakun
is expected to be moderated when the Murum plant comes onstream in 2015. Any
major interruption in power supply could undermine the state’s power system
security and pose a challenge to SEB in negotiations with potential SCORE
customers.
“However, we draw
some comfort to learn that thegroup managed to secure new power purchase
agreements and term sheets subsequent to the June 2013 blackout in Sarawak,” it
commented.
(Borneo Post Online
/ 01 September 2014)
---Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com
No comments:
Post a Comment