[RAM] RAM Ratings affirms Golden Agri's AA2(s) issue rating

RAM Ratings has affirmed the AA2(s)/Stable rating for the RM5.0 bil Islamic Medium-Term Notes (IMTN) Programme (2012/2042) issued by Golden Assets International Finance Limited, a funding conduit of Indonesia-based plantation company, Golden Agri-Resources Ltd (GAR or the Group).

The affirmation is premised on GAR’s leading business position as the world’s second-largest oil palm planter and a major producer in Indonesia’s downstream cooking oil sector. The Group benefits from a high degree of vertical integration, which supports operational resilience and efficiency. GAR’s crude palm oil (CPO) yield of around 4.3-4.5 MT per mature hectare, remains superior to most large regional peers. However, exposure to CPO price volatility and the challenging Indonesian operating environment, where the regulatory framework is less stable, continues to constrain the rating.

In FY Dec 2024, GAR’s operating profit before depreciation, interest and tax (OPBDIT) climbed 13.68% to USD964.8 mil (FY Dec 2023: USD848.6 mil), broadly in line with our expectations. This improvement was attributed to strong upstream performance, supported by higher CPO prices for the year and increased FFB output in the second half. Downstream results remained relatively stable, with limited exposure to the still challenging oleochemical sector, distinguishing GAR from other integrated regional players.

Growth momentum continued into 1H fiscal 2025, with OPBDIT rising 24.6% to USD513 mil (1H fiscal 2024: USD412 mil) on the back of a 9.9% increase in plantation output and a 19% rise in CPO prices. GAR’s downstream operations, focused on edible oils for business and consumer markets, continue to demonstrate stability amid competitive market conditions. 

GAR’s financial profile strengthened, supported by solid upstream performance and a modest reduction in debt. Adjusted gearing and funds from operations debt coverage ratios improved to 0.34 times and 0.46 times, respectively, as at end-June 2025 (end-June 2024: 0.38 times and 0.31 times). Steady cashflow generation, along with higher but manageable capital expenditure and investments, is expected to support further deleveraging and enhance the Group’s credit metrics.   

The (s) suffix attached to the IMTN rating reflects GAR’s credit risks in view of its irrevocable and unconditional undertaking to fulfil its obligations to Golden Assets to ensure principal and profit payments or any amount falling due under the RM5.0 bil programme are met.


Analytical contacts
Kee Hwai Zher 
(603) 2708 8259
hwaizher.kee@ram.com.my

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

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(603) 2708 8212
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