MARC Affirms Rating of AAAIS(FG) on Symphony Life Berhad's Guaranteed Islamic MTN Programme
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MARC Affirms Rating of AAAIS(FG) on Symphony Life Berhad's Guaranteed Islamic MTN Programme
Islam, Mal
Islam, Mal
Transcription
- 11 /23/2016 Latest Announcement - (News ID : 2016112300010) Latest Announcement News ID : 2016112300010 Subject : SYMPHONY LIFE BERHAD SYMPHONY LIFE BERHAD Organisation Name: MALAYSIAN RATING CORPORATION News Type: RATING ANNOUNCEMENT Reference Site: None Embargo Date: 23/11/2016 Embargo Time: 10:10 AM Expiry Date: 07/12/2016 Priority: Medium Summary: MARC AFFIRMS RATING OF AAAIS(fg) ON SYMPHONY LIFE BERHAD'S GUARANTEED ISLAMIC MTN PROGRAMME Attachments: No attachment available. Disclaimer: The user, including a user who is also a FAST Participant, expressly agrees that the use of this website which is accessible at https://fast.bnm.gov.my/ is at the user's sole risk. The information contained in this FAST website is compiled by MyClear Sdn. Bhd. (MyClear) and is provided on an "as is" basis without any representations or warranties of any kind, either expressed or implied. While MyClear makes every effort to ensure that information contained in the FAST website are accurate and disseminated in a timely and efficient manner, the user acknowledges that delays, errors, omissions or inaccuracies may occur. MyClear disclaims any liability pertaining to the consequences of any delays, errors, omissions or inaccuracies arising out of or relating to the FAST website or information, including but not limited to, any decision made or action taken by a user in reliance upon such information, or for damages suffered, whether direct, consequential, special, punitive, indirect or otherwise, notwithstanding having been advised of the possibility of such damages. In the event of any dispute, the official records of MyClear shall prevail. MyClear, Bank Negara Malaysia or any of its affiliates, officers, directors, agents or any other party involved in creating, producing or delivering the FAST website, shall not be liable for any direct, consequential, special, punitive, indirect, incidental or other damages arising out of or in any way connected with the use or inability to use the FAST website or information, whether based on contract, tort, liability or otherwise, even if advised on the possibility of any such damages. Content MARC has affirmed its rating of AAAIS(fg) on Symphony Life Berhad's (Symphony Life) Guaranteed Islamic MediumTerm Notes (IMTN) Programme with a stable outlook. The affirmed rating and outlook are based on the unconditional and irrevocable financial guarantee insurance provided by Danajamin Nasional Berhad (Danajamin). MARC has an insurer financial strength rating of AAA/stable and longterm/shortterm counterparty credit rating of AAA/MARC1/stable on Danajamin. The outstanding balance under the rated issue is RM150.0 million as at endOctober 2016, with the repayment of RM20.0 million due on November 30, 2017 in line with the reduction schedule of the programme. Symphony Life's standalone credit profile has come under increased pressure from weakening prospects for the domestic property sector, which has resulted in the group undertaking fewer property launches. In addition, increased borrowings and a slower pace of construction in line with the longer duration for delivery of vacant possession on some of its ongoing projects have weighed on the group's profitability. For the financial year ended March 31, 2016 (FY2016), Symphony Life launched three projects (one each in Kedah, Kelantan and Kuala Lumpur) and completed two projects namely Tijani Ukay and Tower 28 at The Wharf Residences, in Selangor. It has seven projects under construction with a total gross development value (GDV) of RM1.6 billion as at endJune 2016. The overall takeup rate for ongoing projects has remained flat at 69.3% (endJune 2015: 70.5%); among its projects, the response to its Tijani Raja Dewa project in Kelantan which was launched in April 2015 has remained particularly weak with a takeup rate of 23.4%. Contracted sales, which increased to RM963.0 million as at endJune 2016 from RM710.0 million at endJune 2015, is expected to provide earnings visibility over the medium term. For 2017, Symphony Life has planned five launches comprising highend condominiums and serviced apartments with a GDV totalling RM2.3 billion. MARC views the demand risk for these projects as high given the prevailing soft property market conditions, price affordability concerns and tightened credit conditions. In addition, the longer duration for delivery of vacant possession ranging from 48 to 60 months for some of its projects could expose the group to construction and market risks. Symphony Life has 833.8 acres of undeveloped land as at endJune 2016, which indicates land bank sufficiency to sustain property development activities over the medium term. About 94.1% of Symphony Life's land bank is in Sungai Long, Selangor and Sungai Petani, Kedah. For FY2016, revenue and pretax profit declined to RM144.3 million and RM17.6 million respectively, (FY2015: RM286.1 million; RM54.6 million including a oneoff income). The lower revenue and pretax profit were due largely to lower progress billings given that about 83.3% of effective GDV for ongoing projects have a longer delivery for vacant possession period of 48 months or more from launch dates. For unaudited 1QFY2017, Symphony Life reported pretax profit of RM5.3 million, slightly higher from the previous corresponding quarter of RM3.1 million, largely due to contribution from its joint venture company for the Star Residences project. Cash flow from operations (CFO) was negative RM55.5 million on higher working capital, largely from a reduction of payables following the payment on the balance purchase price for Sunway land amounting to RM46.6 million. As at end1QFY2017, Symphony Life's unaudited debttoequity ratio stood at 0.72 times (endFY2016: 0.61 times), reflecting a sharp increase in borrowings to RM422.6 million (endFY2016: RM354.6 million) to fund its purchase of 2.27 acres of land in Sunway, Selangor, ongoing capex on its head office building and inventory of unsold units. The group's financial flexibility stems from unutilised credit lines of RM303.3 million as at endJune 2016. As the ratings and outlook hinge on the guarantee provided by Danajamin, any changes to Symphony Life's rating would be driven by an underlying change in Danajamin's credit strength. Contacts: Wan Abdul Muiz, 032082 2260/ muiz@marc.com.my; Yap Lai Ken, 032082 2247/ laiken@marc.com.my November 23, 2016 [This announcement is available in the MARC corporate homepage at http://www.marc.com.my] Disclaimer This communication is provided by Malaysian Rating Corporation Berhad (MARC) on the basis of information believed by MARC to be accurate and reliable as derived from publicly available sources or provided by the rated entity or its agents. MARC, however, has not independently verified such information and makes no representation as to the accuracy or completeness of such information. Any assignment of a credit rating by MARC is solely to be construed as a statement of its opinion and not a statement of fact. A credit rating is not a recommendation to buy, sell, or hold any security. © 2016 Malaysian Rating Corporation Berhad https://fast.bnm.gov.my/fastweb/public/PublicInfoServlet.do?chkBox=2016112300010&mode=DISPLAY&info=NEWS&screenId=PB010400 1/1
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