Skip to content
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
    • MARCares
    • Events
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
    • MARCares
    • Events
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
  • MARC Online
  • Subscribe
  • Group

    Group

    The MARC Group of Companies comprises MARC Ratings, MARC Solutions, MARC Data and MARC Learning.

    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning

    MARC Ratings

    • Rating Guide
    • Rating Process
    • Rating Symbols & Definitions
    • Rating Methodologies
    • Regulatory
    • Lead Managers

    MARC Solutions

    MARC Data

    MARC Learning

    • Careers
    • Careers
  • Services

    Services

    MARC's subsidiaries each provide distinct product offerings and services.

    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Analytics Consulting Services
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights

    Insights

    Find the vital information you need and stay up to date with the latest news from MARC.

    • Rating Announcements
    • Research & Analysis
    • Views
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Latest@MARC
    • MARC in the Media
    • Latest@MARC
  • Events & CSR

    Events & CSR

    MARC organises a diverse range of events throughout the year to engage with all stakeholders.

    • MARCares
    • Events
    • MARCares
    • Events
  • Contact Us

    Contact Us

    Let's get the conversation started - Get in touch with us!

    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
MARC Online
Subscribe
Menu
  • Group
  • Services
  • Insights
  • Events & CSR
  • Contact Us
  • Group
  • Services
  • Insights
  • Events & CSR
  • Contact Us
Credit Ratings & Related Assessments
Economic & Fixed-Income Analysis
Sustainability Related
Analytics Consulting Services
Data Analytics
Credit Reporting
Learning Programme

Credit Ratings & Related Assessments

Economic & Fixed-Income Analysis

Sustainability Related

Debt Advisory

Analytics Consulting Services

Data Analytics

Credit Reporting

Learning Programme

  • Insights
  • Rating Announcements
Ratings

MARC Ratings affirms AA-IS rating on MRCB’s RM5.0 billion Sukuk Murabahah

19 September 2023

Access the full report here.

View Reports

Contacts

Farhan Darham
+603-2717 2945/ farhan@marc.com.my

Fatin Sadiqah Saberam
+603-2717 2934/ fatin@marc.com.my

Yazmin Abdul Aziz
+603-2717 2948/ yazmin@marc.com.my

MARC Ratings has affirmed its AA-IS rating on Malaysian Resources Corporation Berhad’s (MRCB) Islamic Medium-Term Notes Programme of up to RM5.0 billion (Sukuk Murabahah) with a stable outlook.

MRCB’s established track record in property development with a focus on transit-oriented developments (TOD) and its strong position in the domestic construction sector with sizeable infrastructure contracts remain key rating drivers. The rating also incorporates the support extended by key shareholder, the Employees Provident Fund Board. These strengths are moderated by MRCB’s thin margins and high working capital needs primarily due to the lengthy collection period for its construction-related receivables, as well as a challenging property sector outlook.

MRCB had about RM5.4 billion in outstanding external construction order book as at end-June 2023, providing earnings visibility through 2027. MARC Ratings, nevertheless, notes the reduction in order book from around RM10 billion as at end-March 2020. However, a rebuild of the order book is likely in the near- to medium-term as more projects are tendered including the redevelopment of the Shah Alam Stadium, the new MRT3 project in the Klang Valley, the Pan Borneo Highway project in Sabah, and a flood mitigation project in Pahang. The more complex nature of some of these projects is also positive from a margin standpoint and could improve MRCB’s overall operating profit margin which has remained in the single digits in recent years, in part due to higher material and labour costs.

For its ongoing property projects, MRCB had approximately RM280 million in gross development value (GDV) as at end-June 2023, significantly lower compared to the RM3.1 billion as at end-March 2020. Given a challenging property market outlook, MRCB has taken the approach of slowing its property launches. The lower GDV was also due to the completion of the group’s Sentral Suites project in 2023. The overall take-up rate for MRCB’s ongoing projects was 55% as at end-June 2023. The slow take-up could see inventory level for unsold completed property rising over the near term from RM582.5 million as at end-June 2023 (end-2022: RM220.8 million).

On the local front, the group had minimal unbilled sales of RM43.7 million as at end-June 2023, but has plans to launch a new project with a GDV of RM372 million over the near term. We note that MRCB has 64.3 acres of land at the strategic Kwasa Sentral, which is fast developing into a key mixed development area in the Klang Valley. The group has also planned for three TOD projects at PJ Sentral Garden City, Penang Sentral and Cyberjaya City Centre, that could support top line growth over the medium to longer term. The rating agency also notes that through its 27.9%-owned associate, Sentral REIT (formerly known as MRCB Quill REIT), MRCB receives stable rental earnings of RM15.8 million p.a. Sentral REIT currently has nine commercial buildings — four each in Cyberjaya and Kuala Lumpur, and one in Penang — collectively valued at RM2.1 billion. The REIT will acquire Menara CelcomDigi, a 27-storey office tower with 450,000 sq ft of net lettable area (NLA) for RM450 million; the acquisition will increase its NLA to about 2.5 million sq ft.

Abroad, MRCB launched VISTA in April 2023, a residential project in Gold Coast, Australia, with a GDV of AUD391 million. The 51-storey, 280-unit VISTA is expected to be completed by end-2026. MRCB also plans to undertake a NZD452 million TOD above the City Rail Link Aotea station in Auckland, New Zealand, after the expected completion of the Aotea Central Station in 2026. The rating agency expects MRCB’s overseas projects to somewhat offset the uncertainties in the domestic property market.

Group revenue declined by 11.2% y-o-y to RM1.3 billion in 1H2023 due to lower contribution from its engineering, construction and environment segment following the completion of the MRT2 and DASH packages in 2022. Pre-tax profit sharply declined by 40.1% y-o-y to RM35.8 million on higher finance and operating costs. Total borrowings rose y-o-y to RM2.3 billion as at end-June 2023, translating into gross and net debt-to-equity ratios of 0.50x and 0.34x. The outstanding RM1.65 billion Sukuk Murabahah accounted for 73% of total borrowings.

Related Report

Read More

Related Issues

Read More

Related News

Read More

You May Also Like To Read

See All
Ratings

MARC Ratings assigns final ratings of AAA/AAAIS to Cagamas’ RM80.0 billion MTN/IMTN Programmes

23 May 2025

Ratings

MARC Ratings withdraws rating on UiTM Solar Power’s Sukuk

21 May 2025

Ratings

MARC Ratings affirms ratings on Bank Pembangunan following acquisition of two development financial institutions

20 May 2025

See All

Let’s get started.

Subscribe to our mailing list today.

Subscribe Now
Group
  • About MARC
  • Leadership
  • Investor Relations
  • Notable Issuances
  • Careers
Regulatory
  • Rating Reviews Summary
  • List of Defaults
  • List of Credit Ratings Published
  • List of Entities on Rating Watch
Services
  • Credit Ratings & Related Assessments
  • Sustainability-Related Assessments
  • Economic & Fixed-Income Analysis
  • Sustainability-Related Advisory
  • Subscriptions
  • Analytics Consulting Services
  • Data Analytics
  • Credit Reporting
  • Learning & Customised Programmes
Subsidiaries
  • MARC Ratings
  • MARC Learning
  • MARC Data
  • MARC Solutions
Insights
  • Rating Announcements
  • Research & Analysis
  • Views
  • Latest@MARC
  • MARC in the Media
Events
  • Corporate Events
  • Corporate Social Responsibility (CSR)
  • Advertise with MARC
Contact Us
  • Contact Us
  • Service Level Feedback Form
  • Publication Feedback Form
  • Whistleblowing
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
    • MARCares
    • Events
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
Terms & Conditions
Privacy Notice
Copyright Notice
Whistleblowing
PDPA Notice
© 2023 Malaysian Rating Corporation Berhad. All rights reserved.
Facebook Twitter Linkedin

Join MARC Mailing List

I would like to subscribe this mailing list. Please tick whichever is applicable
I agree/ do not agree (please tick whichever is applicable) to receive future events, conferences or marketing materials from MARC. *
Privacy Notice *
Declaration *