PETALING JAYA: RAM Ratings has reaffirmed the AAA rating of British American Tobacco (M) Berhad’s (BAT Malaysia) RM700mil Medium-Term Notes Programme (2007/2020).
At the same time, the AAA/P1 ratings of the Group’s RM100mil Commercial Papers/Medium-Term Notes Programme (2007/2014) have also been reaffirmed.
All the long-term ratings have a stable outlook.
BAT Malaysia is involved in the manufacturing, marketing and distribution of cigarettes.
Its portfolio encompasses global drive brands (Dunhill, Pall Mall and Kent) as well as other well-established international names such as Rothmans and Benson & Hedges.
RAM Ratings said BAT Malaysia’s credit profile was supported by its entrenched market position and superior financial profile.
Although its share of domestic sales contracted 1.8 percentage points year-on-year in 2009, the group remained the clear leader with a 60.3%-share of the market.
Given BAT Malaysia’s strong brand equity, it has been enjoying healthy margins on operating profit before depreciation, interest and tax of 27% to 30% for the past five years.
“Looking ahead, we expect BAT Malaysia’s cashflow-protection measures to stay superior,” opined Kevin Lim, Head of Consumer & Industrial Ratings.