KUALA LUMPUR: RAM Ratings has upgraded the long-term rating of YTL Corp Bhd
’s debt programmes.
Concurrently, the outlook on the facilities has been revised to stable from positive. The short-term rating remains at P1, it said.
The rating agency said the upgrade reflects sustained improvements in YTL Corp’s operating and financial profile, underpinned by stronger performance across its core investments.
It said the group’s return on capital employed has improved to between 8% and 10% over the past two years from about 5% previously, supported by resilient earnings from its regulated utilities, cement, hospitality and property businesses, alongside strong liquidity and financial flexibility.
Earnings growth has been driven by a turnaround at key subsidiaries, including YTL Power International and YTL Cement, as well as better performance in the hotels and property segments.
Operating profit before depreciation and tax rose to RM8.3bil in fiscal 2025, lifting pre-tax profit to above RM3bil annually.
While debt is expected to rise to fund digital infrastructure expansion, RAM said cash flow coverage and dividend inflows remain adequate to support the group’s credit profile, with new digital and renewable energy projects expected to provide medium-term growth.
The rating agency has also has upgraded the long-term ratings of YTL Power International Bhd’s (YTLPI) sukuk programmes.
Concurrently, the outlook on the facilities has been revised to stable from positive, it said.
“The short-term rating remains at P1. The upgrade reflects sustained improvements in YTLPI’s fundamental operating and financial profile, underpinned by demonstrable strengthening in its core investments, as evidenced by the growth in the group’s return on capital employed to around 9% over the past three years (fiscal 2021: 3.6%).
“These improvements are supported by YTLPI’s sturdy track record in long-term, regulated concession businesses – primarily infrastructure and utilities – as well as its superior liquidity and financial flexibility, which provide substantial financial buffers and leverage headroom.”
RAM Ratings said a strong turnaround in profitability from core power generation and water subsidiaries has propelled earnings, with operating profit before depreciation, interest and tax tripling over five years to reach a high of RM6.5bil in fiscal 2024.
“The group’s pre-tax profit now exceeds RM2bil annually. The expansion into data centres and artificial intelligence, alongside contributions from its Jordan power plant and upcoming renewable energy assets, is expected to further diversify and grow earnings.”
