[RAM] RAM Ratings affirms Malayan Cement's AA1/Stable/P1 sukuk

RAM Ratings has affirmed the AA₁/Stable long-term and P1 short-term issue ratings for Malayan Cement Berhad’s (Malayan Cement or the Company) RM5.0 billion Sukuk Murabahah Programme (2022/2052). The affirmation reflects the Company’s robust business and financial profile, supported by its strong market position, conservative leverage, strong debt coverage and sustained earnings growth, underpinned by firm cement and concrete demand, stable average selling prices (ASPs) and improved cost efficiencies.

Malayan Cement remains Malaysia’s largest cement producer, commanding approximately 65% market share in Peninsular Malaysia. This leadership is supported by an extensive network of production plants and logistics network. The Company also supplies intra-group needs across YTL Corporation Berhad’s (YTL Corp) infrastructure, construction and property development businesses.

For FY June 2025, Malayan Cement reported stable revenue of RM4.53 bil (+1.8% y-o-y), while operating profit before depreciation, interest and tax (OPBDIT) climbed 30.9% y-o-y to RM1.23 bil. This performance was supported by stable ASPs, lower rebates and improved cost efficiencies. The positive momentum continued into 1Q FY June 2026, with revenue and OPBDIT rising 3.8% and 15.9% y-o-y, respectively.

The Company’s balance sheet continues to strengthen on the back of strong cash generation. Total debt fell to RM2.74 bil as at end-September 2025 (end-June 2022: RM3.86 bil), lowering gearing to 0.39 times while funds from operations debt coverage improved to 0.44 times (end-June 2024: 0.50 times; 0.34 times). RAM’s sensitised projections indicate that gearing is expected to remain below 0.40 times, with FFODC above 0.35 times over the next two to three years. A slightly tighter supply–demand environment and easing coal prices further support earnings visibility.

The ratings also benefit from an uplift based on RAM’s group rating links assessment, reflecting our expectations of a ‘high’ likelihood of extraordinary financial support from its ultimate parent, YTL Corp (rated AAA/Stable/P1 by RAM), if required, when in distress. The Company is a key contributor to YTL Cement, accounting for over 73% of revenue and 76% of profit before tax in FY Jun 2025). YTL Cement constitutes almost the entirety of YTL Corp’s Cement and Building Materials segment, underscoring its strategic importance within the broader YTL Group.

Looking ahead, demand prospects remain favourable, supported by steady construction activity, infrastructure project rollouts and expanding industrial developments. YTL Cement’s strategic initiatives, including the proposed acquisition of SCIB Concrete Manufacturing Sdn Bhd in Sarawak and more recently, the proposed acquisition of Hume Concrete Sdn Bhd, are expected to offer longer-term market expansion potential.


Analytical contacts
Tan Yan Choong
(603) 2708 8256
yanchoong@ram.com.my

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

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