[RAM] RAM Ratings affirms Press Metal's AA1 IMTN Programme rating

RAM Ratings has affirmed the AA1/Stable rating on Press Metal Aluminium Holdings Berhad’s (Press Metal or the Group) RM5.0 bil Islamic MTN (IMTN) Programme (2019/2049) based on its strong market position and solid debt servicing ability.

Press Metal is Southeast Asia’s largest primary aluminium producer, with a competitive cost structure compared to global peers’ which supports its robust financial profile. The inherent price volatility in the aluminium industry, however, remains a key moderating rating factor. We view positively Press Metal’s ongoing investments in upstream assets, including an alumina refinery project in Indonesia and associate stakes in bauxite-mining companies. Upon completion of the refinery plant, the Group will be able to fully secure raw material supply internally, which is expected to enhance its profit margins. Hefty upfront capital requirements can be absorbed by the Group’s strong balance sheet and cashflow generation. Other planned investments include an 80,000 MT extrusion facility in Samalaju and a 100 MW solar plant in Mukah.     

The Group charted strong financial results during the review period. For the first nine months of FY Dec 2025, revenue grew to RM12.16 bil (+7.2% y-o-y), while operating profit before depreciation, interest and tax (OPBDIT) rose to RM2.36 bil (+14.9% y-o-y). These gains were driven by higher selling prices and sales volumes and a lower input cost. Easing alumina prices contributed to improved OPBDIT margins of 19.4%, up from 16.8% in FY Dec 2024. The Group maintained strong credit metrics despite the uptick in total debt to RM4.43 bil (end-December 2024: RM4.08 bil), with funds from operations debt coverage (FFODC), gearing and debt-to-OPBDIT ratio at 0.70 times, 0.38 times and 1.41 times, respectively, as at end-September 2025. These levels – except for gearing – outperform the thresholds typically expected for this rating category. 

Looking forward, we expect these ratios to moderate from current levels, reflecting the gradual rise in borrowings, which are projected to peak at around RM7 bil by end-2027. Sensitised projections – incorporating a conservative aluminium price assumption (USD2,200/MT for unhedged portions) and potential project delays – suggest credit metrics will remain broadly aligned with rating thresholds, although temporary weakness may be seen in fiscal 2027 given the elevated debt level. Press Metal’s FFODC and gearing are projected to average a respective 0.55 times and 0.38 times in the fiscal 2025-2027 period, commensurate with the rating.

We anticipate aluminium prices to remain supportive in the medium term, underpinned by rising production costs, limited capacity expansions in China and the sustained demand growth, structurally lifted by the global shift towards green energy. Higher US tariffs have not materially impacted global (ex. US) consumption, as evidenced by resilient aluminium prices in 11M 2025, although market uncertainties persist.


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Hani Hamizah Nor Hashim
(603) 2708 8240
hani@ram.com.my

Thong Mun Wai
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munwai@ram.com.my

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