MARC Ratings has affirmed its ratings of MARC-1IS/AAIS on Northport (Malaysia) Bhd’s RM1.0 billion Islamic Commercial Papers (ICP) Programme/ Islamic Medium-Term Notes (IMTN) Programme (Sukuk Wakalah Programmes). The ICP programme has a sublimit of RM500 million. The long-term rating outlook is stable. The current outstanding under the programme comprises RM500.0 million IMTN.
Northport’s well-established operational track record as a key port operator in Port Klang, its healthy profitability, and strong cash flow generation remain key rating drivers. The ratings are moderated by concerns over global trade flows and sizeable capex requirements to further strengthen its operations.
In 5M2025, Northport’s container throughput grew 4.0% y-o-y to 1.4 million twenty-foot equivalent units (TEUs), supported by a stronger local container segment on higher import and export activities at Port Klang, while transshipment growth was more modest due to fewer vessel calls. Conventional cargo volume rose 6.2% y-o-y to 5.2 million freight weight tonnes (FWTs), driven by higher dry and break bulk activities, particularly coal shipments and vehicle roll-on/roll-off handling, though growth was partly offset by weaker liquid bulk performance amid softer palm oil exports to India and reduced handling of petroleum products during the period.
Northport’s slightly lower revenue of RM386.5 million reflects lower income from construction works following the completion of a container block. Operating profit, however, was 19.6% higher y-o-y at RM122.1 million in 5M2025 (5M2024: RM102.1 million), supported by higher throughput volume. Cash flow coverage metrics remained strong, with cash flow from operations interest and debt coverages of 20.0x and 0.75x. Given its sustained operating performance, its internal cash generation would remain supportive to part fund its capex requirements. Northport’s debt-to-equity (DE) and net DE ratios would stand at 0.49x and 0.29x, following the new issuance of RM500.0 million under the Sukuk Wakalah programmes in August 2025 to fund its ongoing port infrastructure works and equipment replacement programme. The outstanding sukuk have a long maturity profile, with the first RM150.0 million only falling due in August 2030.
Going forward, the impending gradual increase in tariff of up to 30.0% from mid-2025 through 2027 would provide protection from some potential gyration in trade volumes and offers earnings growth opportunity in the long term.