[RAM] RAM Ratings affirms Avaland's ratings

RAM Ratings has affirmed Avaland Berhad’s (Avaland or the Group) AA₃/Stable/P1 corporate credit ratings and the AA₃/Stable rating of its RM1 billion Sukuk Murabahah Programme.

The affirmation reflects the Group’s improving business profile, healthy margins and adequate debt coverage. The ratings also incorporate an uplift for parental support. Under RAM’s group support criteria, Avaland is viewed as highly likely to benefit from the backing of its parent, Ayala Land Inc (Ayala Land), if required. Besides exerting significant influence over Avaland’s business and management strategies, Ayala Land has provided operational and financial support since acquiring the Group in 2018, including RM243.1 mil in shareholder advances as at end-March 2025. As Ayala Land’s sole strategic investment outside the Philippines, Avaland forms an integral part of the former’s forward plans. 

The Group’s revenue and operating profit before depreciation, interest and tax rose to RM893.63 mil and RM172.87 mil, respectively, in FY Dec 2024 (FY Dec 2023: RM607.12 mil and RM105.75 mil). This was mainly driven by accelerated construction progress across Avaland’s ongoing developments and healthy demand for new launches, including Casa Embun Phase 2, Amika Residences and Aetas Seputeh. In 1Q FY Dec 2025, lower contributions from projects nearing completion moderated revenue by 16% y-o-y to RM179.5 mil. Earnings are expected to remain subdued this year due to slower recognition from newer projects and macroeconomic headwinds. Planned launches for the year have a collective gross development value of approximately RM900 mil. 

As at end-March 2025, Avaland’s gearing ratio increased to 0.71 times (end-December 2023: 0.57 times) on the back of a RM300 mil sukuk issuance in August 2024. Despite a heavier debt load, the Group’s funds from operations (FFO) debt coverage improved to 0.21 times in FY Dec 2024 (FY Dec 2023: 0.18 times) in view of stronger earnings. These financial metrics came in better than anticipated due to some delays in land acquisition. For 1Q fiscal 2025, FFO debt coverage declined to an annualised 0.13 times. As Avaland takes on debt to finance land acquisitions, gearing is projected to hover around 0.78 times over the next two years while FFO debt coverage will stay adequate at about 0.15 times. 


Analytical contacts
Jeremy Noel Paul
(603) 2708 8230
jeremynp@ram.com.my

Thong Mun Wai
(603) 2708 8255
munwai@ram.com.my

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Sakinah Arifin 
(603) 2708 8212
sakinah@ram.com.my