KUALA LUMPUR: S P Setia Bhd's shares advanced on Thursday, Dec 9 after RAM Ratings eaffirmed the AA3 rating of the company's RM500 million Nominal Value of 2% Redeemable Serial Bonds (Bonds) with 168,151,302 Detachable Warrants (2007/2012).
The long-term rating has a stable outlook.
S P Setia gained 24 sen to RM5.60 with 854,400 shares done at 10.43am.
In a statement Dec 9, RAM Ratings said the rating reflected S P Setia's strong business profile as a leading property developer in Malaysia.
For the first 11 months of FYE 31 October 2010, the Group's sales reached RM2.11 billion, exceeding its targeted RM2 billion for the full fiscal year.
RAM Ratings head of real estate and CONSTRUCTION [] ratings Shahina Azura Halip said that with its strong branding and innovation, S P Setia was expected to continue churning impressive sales based on its track record of annual sales growth over the past decade, irrespective of economic cycles.
Meanwhile, the Group's RM1.81 billion of unbilled sales as at end-September 2010 is expected to generate an assured stream of earnings over the next few years, she said.
RAM Ratings said aside from its large stable of ongoing projects, S P Setia had over 3,800 acres of undeveloped land in various prime locations within the Klang Valley, Penang and Johor, which are expected to keep it busy for at least another decade.
'The group also has a healthy liquidity profile; as at end-July 2010, its coffers contained RM685.23 million of cash against RM401.36 million of short-term debt obligations,' it said.
The rating agency said on the flip side, the rating was moderated by the uncertainties of S P Setia's foreign ventures.
Meanwhile, its debt level is expected to increase from RM1.29 billion (as at end-July 2010) to around RM2.1 billion, some RM400 million higher than RAM Ratings' earlier projection, it said.
It said S P Setia had however, redeemed RM250 million of the Bonds on Nov 23, 2010.
Elsewhere, heftier start-up and construction costs as well as marketing expenses are expected to keep its margin operating profit before depreciation, interest and tax (OPBDIT) in the mid-teens, it said.
'As a result, its near-term OPBDIT debt cover is expected to hover around 0.15 times while its operating cashflow is anticipated to stay in the red as more funds are deployed for working capital and land payments.
'Overall, S P Setia's credit-protection measures are considered weak for its rating. As such, further deterioration of its financial metrics beyond the projected numbers would add pressure to its credit profile, it said.
The long-term rating has a stable outlook.
S P Setia gained 24 sen to RM5.60 with 854,400 shares done at 10.43am.
In a statement Dec 9, RAM Ratings said the rating reflected S P Setia's strong business profile as a leading property developer in Malaysia.
For the first 11 months of FYE 31 October 2010, the Group's sales reached RM2.11 billion, exceeding its targeted RM2 billion for the full fiscal year.
RAM Ratings head of real estate and CONSTRUCTION [] ratings Shahina Azura Halip said that with its strong branding and innovation, S P Setia was expected to continue churning impressive sales based on its track record of annual sales growth over the past decade, irrespective of economic cycles.
Meanwhile, the Group's RM1.81 billion of unbilled sales as at end-September 2010 is expected to generate an assured stream of earnings over the next few years, she said.
RAM Ratings said aside from its large stable of ongoing projects, S P Setia had over 3,800 acres of undeveloped land in various prime locations within the Klang Valley, Penang and Johor, which are expected to keep it busy for at least another decade.
'The group also has a healthy liquidity profile; as at end-July 2010, its coffers contained RM685.23 million of cash against RM401.36 million of short-term debt obligations,' it said.
The rating agency said on the flip side, the rating was moderated by the uncertainties of S P Setia's foreign ventures.
Meanwhile, its debt level is expected to increase from RM1.29 billion (as at end-July 2010) to around RM2.1 billion, some RM400 million higher than RAM Ratings' earlier projection, it said.
It said S P Setia had however, redeemed RM250 million of the Bonds on Nov 23, 2010.
Elsewhere, heftier start-up and construction costs as well as marketing expenses are expected to keep its margin operating profit before depreciation, interest and tax (OPBDIT) in the mid-teens, it said.
'As a result, its near-term OPBDIT debt cover is expected to hover around 0.15 times while its operating cashflow is anticipated to stay in the red as more funds are deployed for working capital and land payments.
'Overall, S P Setia's credit-protection measures are considered weak for its rating. As such, further deterioration of its financial metrics beyond the projected numbers would add pressure to its credit profile, it said.
No comments:
Post a Comment