MARC has affirmed its ratings on Berjaya Land Berhad’s (BLand) RM500.0 million Medium-Term Notes (MTN) Programme guaranteed by Danajamin Nasional Berhad (Danajamin) and RM150.0 million MTN Programme guaranteed by OCBC Bank (Malaysia) Berhad (OCBC Malaysia). The ratings of AAA(fg) and AAA(bg) carry a stable outlook. The affirmed ratings reflect the unconditional and irrevocable guarantees provided by Danajamin (rated AAA/Stable) and OCBC Malaysia (rated AAA/Stable).
BLand’s credit profile has continued to be impacted by business closures due to the pandemic, particularly in its hotels and resorts segment. Overall occupancy rate at the group’s hotels declined further to 19.8% during the financial year ended June 30, 2021 (FY2021), widening the division’s operating loss to RM152.0 million (FY2020: RM85.8 million). The group’s earnings remained supported by key subsidiary Berjaya Sports Toto Berhad (BToto) whose domestic number forecasting operations (NFO) through Sports Toto Sdn Bhd and motor retailing business in the United Kingdom are gradually recovering from the impact of the pandemic.
Its domestic property development activities are largely limited to the Tropika residential project in Bukit Jalil with a total gross development value (GDV) of RM852 million, and the ongoing Hanoi Garden City project in Vietnam, where the group is currently constructing 86 units of shophouses (GDV: RM153.5 million) with expected completion in 3Q2022.
During FY2021, BLand registered pre-tax loss of RM42.2 million (FY2020: pre-tax profit of RM213.6 million) in the absence of significant gains from disposals as registered a year earlier. BLand would continue to rely on proceeds from asset disposals and refinancing to address its long-term financial obligations. With the decline in borrowings following the settlement of some term loans, group debt-to-equity ratio improved slightly to 0.52x (FY2020: 0.58x).
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