MARC Ratings has affirmed its AAIS/Stable rating on port operator Pelabuhan Tanjung Pelepas Sdn Bhd’s (PTP) Islamic Medium-Term Notes (Sukuk Murabahah) Programme which will be upsized to RM3.5 billion from RM2.15 billion.
The rating reflects PTP’s strong position as a major container transshipment port operator in the region, improved operating efficiency and healthy cash flow generation. Moderating the rating is the susceptibility of the port handling volumes to global trade movements, which are highly sensitive to economic conditions and geopolitical events.
The rating also benefits from the considerable expertise of PTP’s shareholders, MMC Port Holdings Sdn Bhd (MMC Port) (70%), and Netherlands-based APM Terminals B.V. (30%), which have proven track records in port development and operations. APM Terminals is owned by A.P. Moller-Maersk A/S (Maersk), one of the world’s largest shipping companies and a key customer of PTP, consistently contributing to about 70% of PTP’s throughput volume over the past five years. This throughput volume is forecast to increase to 80% in the medium term under the Gemini Cooperation, a long-term operational collaboration between Maersk and Hapag-Lloyd AG. Utilising the hub-and-spoke model, PTP will connect regional gateway ports with 12 other transshipment hubs that are majority owned and/or controlled by Maersk or Hapag-Lloyd. The operations, which commenced in February 2025, have not faced any hitches to date.
MARC Ratings notes that given the port’s increased importance — having been identified as one of the three key hubs in Asia and the Middle East, alongside Port of Singapore, and Port of Salalah in Oman — PTP is undertaking a capacity expansion involving the construction of a new berth, the purchase of port equipment, and the expansion of its container yard. The expansion is expected be completed by end-2029, with the handling capacity projected to increase to about 16.0 million twenty-foot equivalent units (TEUs) from the current 13.5 million TEUs. Anticipated to cost about RM4.4 billion, the expansion will be funded through internal funds and net borrowings of about RM870 million; total borrowings is expected to increase to RM3.2 billion by end-2027.
The rating agency views PTP’s strong cash flow generation capacity of about RM800 million annually over the last three years and healthy cash balances that stood at about RM1.0 billion as at end-2024, allay any concerns on the debt increase. Gross debt-to-equity ratio is estimated to peak at about 0.9x in 2026 before retreating to about 0.6x by 2028. Cash flow from operations interest and debt coverages stood at 9.23x and 0.31x as at end-2024, and are forecast to be above 6.0x and 0.2x over the medium term.
Total outstanding notes under the rated Sukuk Murabahah Programme stood at RM2.095 billion. Of this, RM270 million maturing in June 2025 and RM295 million in August 2025 are expected to be partly refinanced through the new sukuk issuances.