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

Credit Ratings & Related Assessments

Sustainability- Related Assessments

Economic & Fixed-Income Analysis

Subscriptions

Sustainability- Related Advisory

Corporate & Debt Restructuring Advisory

Analytics Consulting Services

Data Analytics

Credit Reporting

Learning & Customised Programme

  • Insights
  • Rating Announcements
Ratings

MARC Ratings assigns preliminary ratings of MARC-1IS/AIS To GBG’s proposed RM200 million ICP/IMTN programme

1 August 2022

Access the full report here.

View Reports

Contacts

Farhan Darham, +603-2717 2945/ farhan@marc.com.my
Lim Wooi Loon, +603-2717 2943/ wooiloon@marc.com.my

MARC Ratings has assigned preliminary ratings of MARC-1IS /AIS to Gabungan AQRS Berhad’s (GBG) proposed RM200 million Islamic Commercial Papers (ICP)/Islamic Medium-Term Notes (IMTN) Programme. The ratings outlook is stable.

The ratings reflect GBG’s moderate construction order book, its low counterparty risk from the largely government-related construction contracts, and its earnings visibility through 2024. The key moderating factor is the challenging operating environment for construction players amid rising raw materials and labour costs.

GBG was established in 2010 mainly as a construction company following a merger of four entities and was listed on Bursa Malaysia in 2012. A restructuring exercise in 2016 under a new management was undertaken to streamline business operations. We note that over the years, GBG has built a track record in undertaking government-related construction projects. As at end-March 2022, its construction order book of RM1.2 billion comprises contracts for Sungai Besi-Ulu Kelang Elevated Expressway (SUKE), Pusat Pentadbiran Sultan Ahmad Shah (PPSAS), East Coast Rail Link (ECRL), Light Rail Transit 3 (LRT3) and PR1MA Gambang (affordable housing), among others. As its construction projects are largely with the government, counterparty credit risk is deemed low. We understand that the group is currently tendering for new government-related infrastructure projects amounting to between RM800 million and RM1.0 billion.

Over the near term, the PR1MA Gambang and LRT3 projects — which account for about 28% and 22% of GBG’s total order book as at end-March 2022 — will be key earnings drivers. We note that the operating profit margin, which stood at 7.2% in 2021, could come under pressure from the rising raw material costs and labour shortages. This concern would be alleviated to some extent by a government measure to allow construction contractors to submit variation of price (VOP) claims for government-related projects affected by these issues. To date, GBG has submitted VOP claims of about RM30 million.

GBG is also involved in property development and has two ongoing residential projects. E’ Island Lake Heaven Residence in Puchong, Selangor, with a gross development value (GDV) of RM502 million as at end-March 2022 has recorded a 73% take-up rate. Its second project, The Peak, which has a GDV of RM689 million and a take-up rate of 40% is being relaunched following a facelift exercise. Total combined unbilled sales stood at RM360 million.

Group financial performance in recent years largely reflects the timing of progress billings on its projects. For 2021, GBG achieved a pre-tax profit of RM25.7 million following a pre-tax loss of RM59.5 million in 2020 due to the impact of the pandemic. In 1Q2022, pre-tax profit was RM6.6 million. Total borrowings of RM298 million as at end-March 2022 translated to gross and net debt-to-equity ratios of 0.61x and 0.30x. We note that about 66% of borrowings are mostly short-term and construction-financing related.

Proceeds of up to RM50 million ICP from the initial issuance under the proposed programme will be largely used to refinance its existing loans and the balance for working capital requirements. Over the near term, about RM80 million cash is expected to be free from encumbrances following the completion of construction projects. This would provide some financial flexibility to meet any working capital needs.

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 MARC-1IS/AA-IS to UDA’s ICP/IMTN Programmes of up to RM1.0 billion

22 March 2023

Ratings

MARC Ratings revises UiTM Solar's rating outlook to stable

22 March 2023

Ratings

MARC Ratings assigns final rating of A to Singer’s RM300.0 million MTN Programme

22 March 2023

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
  • Corporate & Debt Restructuring Advisory
  • Subscriptions
  • Analytics Consulting Services
  • Data Analytics
  • Credit Reporting
  • Learning & Customised Programmes
Subsidaries
  • 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
  • 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 *