RAM Ratings raises outlook on Gamuda debt issues to positive, affirms AA3/P1 ratings.

RAM Ratings has revised from stable to positive the outlook on the long-term ratings of debt programmes under Gamuda Berhad (Gamuda or the Group) and its subsidiaries, while concurrently affirming the programmes' ratings.

Issuer                              Facility                                                       Rating/Outlook
Gamuda Berhad                       RM5.0 bil Islamic Medium-Term Notes Programme (2015/2045)      AA3/Positive
                                    RM800 mil Islamic Medium-Term Notes Programme (2013/2038)      AA3/Positive
                                    RM2.0 bil Islamic Commercial Papers Programme (2022/2029)      P1

Bandar Serai Development Sdn Bhd    RM1.0 bil Islamic Medium-Term Notes Programme (2014/2044)      AA3(s)/Positive

Gamuda Land (T12) Sdn Bhd           RM2.0 bil Islamic Medium-Term Notes Programme (2020/2050)*     AA3(s)/Positive
                                    RM500 mil Islamic Commercial Papers Programme (2020/2027)*
                                    * Combined limit of RM2.0 bil                                  P1(s)

Note: The debt facilities of the two subsidiaries are irrevocably and unconditionally guaranteed by the Group.
The outlook revision reflects Gamuda's advancing business profile and diversified earnings, supported by the Group's strong competitive position, technical prowess and execution track record. Its expanding scale and track record in multiple countries elevate Gamuda significantly above local peers, making it a significant regional contender. While it continues to face substantial execution and market risks, marked progress in key construction jobs and quick-turnaround projects (QTPs) alleviate our concerns. The expanding order book necessitates significant debt funding, resulting in Gamuda's elevated gearing and weaker debt coverage levels for the ratings. However, we believe the fi