RAM Ratings has affirmed the AA3/Stable/P1 corporate credit ratings of Cahya Mata Sarawak Berhad (Cahya Mata or the Group) and the AA3/Stable rating of its RM2.0 bil Islamic Medium-Term Notes (IMTN) Programme (2017/2037). The affirmation reflects Cahya Mata's continued resilience, underpinned by a robust financial profile which will give it the financial headroom to pursue its growth plans, aligned with its expected positive business and earnings trajectory that is supported by ongoing and new major infrastructure projects in Sarawak. Its entrenched market position in Sarawak, while providing it with a key competitive advantage, is also a key moderating rating factor reflecting its high sensitivity to a single state. All said, the Group's dominant position, integrated cement operations, and strategic investments provide a strong foundation for long-term growth despite near-term challenges.

As the sole integrated clinker and cement manufacturer in Sarawak, Cahya Mata is a direct beneficiary of the State's expanding infrastructure development. Despite a slight drop in cement sales volume due to prolonged rainy season in the first half of the year, the Group sustained topline performance at RM1.2 bil. Pre-tax profit surged 48.2% y-o-y to RM190.1 mil, driven by stronger margins from road maintenance projects, improved property sales, and lower operating costs following the suspension of the phosphates division. These gains, together with lower working capital needs and taxes, turned operating cashflow positive for the year. 

The legal suit and arbitration between its phosphates manufacturing business unit, Cahya Mata Phosphates Industries Sdn Bhd (Cahya Mata Phosphates), and Syarikat SESCO Berhad (SESCO) will continue to be a drag on its earnings unless resolved amicably. Following SESCO's termination of power supply in July 2023, operations remain suspended although Cahya Mata Phosphates has proactively begun preparatory work to commence commissioning by 4Q 2025.