09-Dec-2024
RAM Ratings upgrades Bintulu Port Holdings to AAA

RAM Ratings has upgraded the corporate credit ratings of Bintulu Port Holdings Berhad's (BPHB or the Group) to AAA/Stable/P1 from AA1/Positive/P1. Bintulu Port Sdn Bhd, a wholly-owned subsidiary of BPHB, operates Bintulu Port, Sarawak's largest port and Malaysia's sole liquefied natural gas (LNG) export terminal.

The upgrade reflects anticipated stronger government support and improved business conditions stemming from BPHB's expanded role in the Sarawak State Government's (the State) agenda to restructure the port sector for greater competitiveness and efficiency.

Under RAM's support assessment for government-linked entities, we anticipate a very high likelihood of extraordinary support from both federal and state governments. Since our last review, substantial progress has been made towards the State assuming control of Bintulu Port, with Bintulu Port's transition to State ownership expected by year-end. This follows from Malaysia's parliamentary approval in July 2024 to repeal the Bintulu Port Authority Act 1981 and dissolve the Bintulu Port Authority (BPA).

Negotiations for a new Port Operation Agreement (POA) for Bintulu Port Sdn Bhd (BPSB), a wholly owned subsidiary of BPHB, are advancing with active involvement from the Group and the State's Ministry of Infrastructure and Port Development (MIPD). Currently, Bintulu Port operates under an interim arrangement, and the State plans to establish the Sarawak Ports Authority (SARPA) to consolidate oversight across all six state ports.

Looking ahead, Bintulu Port is poised to benefit from improving macroeconomic conditions in Sarawak, with stronger business prospects and operational efficiencies as its strategies increasingly align with the State's port policies. As the most prominent of Sarawak's six ports and a crucial hub for imports and exports - especially Liquified Natural Gas (LNG), Bintulu Port will likely capitalise on rising cargo volume