Find A Rating 
PRESS RELEASES
RAM Ratings raises outlook on Cahya Mata Sarawak’s AA3/P1 ratings to Positive
Published on 20 Aug 2026.
RAM Ratings has revised the outlook on Cahya Mata Sarawak Berhad’s (Cahya Mata or the Group) AA3 long-term corporate credit rating to Positive from Stable, while affirming the rating and its P1 short-term rating. We have also affirmed the AA3 rating of the Group’s RM2.0 bil Islamic Medium-Term Notes Programme (2017/2037), with the issue outlook similarly revised to Positive.
The positive outlook signals our view that Cahya Mata is entering a period in which its business profile could become materially stronger, while sustaining healthy financial metrics going forward. Two large projects are moving from development into earnings contribution: its previously stalled phosphate plant in Bintulu is targeted to begin commercial production from 2H 2026, while Mambong Clinker Line 2 is expected to be commissioned in 2Q 2027. If both ramp up as planned, they should add a new export-oriented earnings stream, reinforce the Group’s entrenched position in cement manufacturing, and lift its medium-term earnings resilience.
The phosphate plant is a key driver of the outlook revision because it could materially diversify Cahya Mata’s earnings beyond its traditional Sarawak construction-materials base. The plant had been idled following a PPA dispute with SESCO in July 2023. Power was restored in September 2025 and commissioning of all four furnaces are ongoing, with two of the furnaces commissioned in the first half 2026. Management targets all four furnaces to ramp up by the end-2026. Successful commercialisation would establish a new business line with meaningful scale relative to the Group’s existing operations.
Clinker Line 2 is the second driver of the positive outlook. The RM750 mil line is expected to end the Group’s reliance on imported clinker, improve production efficiency through a larger and more energy-efficient facility, and support margin expansion in the cement business unit. Together with Cahya Mata’s growing ready-mix concrete footprint, the new line gives the Group a fuller value chain to serve Sarawak’s infrastructure pipeline (estimated at over RM100 bil through 2030) and to defend its position as the State’s sole integrated clinker and cement manufacturer.
Cahya Mata’s FY Dec 2025 performance was weaker at Group level, with revenue declining 7.3% to RM1.1 bil and pre-tax profit falling 42.8% to RM108.8 mil, largely due to a 49.8% drop in Group subsidiary Oiltools’s revenue and wider pre-commissioning losses at the phosphate business. Even so, the core cement business unit remained healthy, with pre-tax profit rising 7.5% to RM160.6 mil for a third consecutive year of improvement. This provides an important earnings base while the Group completes its two major growth projects. We expect Group earnings to rebound from FY Dec 2027, with pre-tax profit projected to average RM333.8 mil over FY Dec 2026-2028.
Although Cahya Mata will take on higher borrowings to fund its enlarged capex programme, we expect the resulting pressure on its financial profile to be temporary. Under our sensitised projections, adjusted gearing is expected to peak at a manageable 0.28 times, while adjusted FFO debt coverage should remain supportive of the rating and recover as the phosphate plant and Clinker Line 2 begin contributing more meaningfully from FY Dec 2027.
The outlook remains subject to execution. The phosphate plant must demonstrate reliable production, market access and pricing, while Clinker Line 2 must be completed and ramped up substantially as planned. We also continue to monitor two legal disputes relating to the phosphate operations, namely, the SESCO arbitration, involving a RM342.3 mil counterclaim, and a minority-shareholder claim that resulted in a final award the Group is contesting. These disputes remain a source of uncertainty given an adverse outcome could create a sizeable cash call and temporarily weaken leverage and debt coverage. We have nevertheless factored this risk by stress-testing a lump sum fully debt-funded adverse payout. Under that extreme scenario, projected gearing of 0.43 times would remain within the rating thresholds, while the resulting drop in FFO debt cover to 0.13 times would be non-recurring in nature. Importantly, the potential impact is viewed as one-off and is not currently expected to prevent the phosphate plant’s commercialisation. As such, while an adverse legal outcome would likely reduce rating headroom and warrant close monitoring, it does not on its own displace the positive outlook, which is anchored by the expected strengthening and diversification of Cahya Mata’s operating profile.
Management-level oversight has improved following a broad C-suite refresh that brought in new leadership across finance, corporate services, internal audit, human resources, risk, administration and business strategy. A suit involving Director Dato Sri Mahmud Abu Bekir Taib remains ongoing and will continue to be monitored for developments that could affect strategic execution or financial discipline.
The ratings could be upgraded if Cahya Mata demonstrates sustained operational and financial performance across its core businesses, while keeping adjusted gearing below 0.50 times and adjusted FFO debt coverage above 0.30 times. Conversely, the outlook could be revised back to stable if the projects fall materially short of expectations, if the Group suffers a sustained loss of market share in its core businesses, or if debt-funded settlements or weaker cash flows cause financial metrics to deteriorate beyond our expectations.
Analytical contacts
Darrel Tiang
(603) 2708 8219
darrel@ram.com.my
Thong Mun Wai
(603) 2708 8255
munwai@ram.com.my
Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my
The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.
RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.
Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.
Published by RAM Rating Services Berhad
© Copyright 2026 by RAM Rating Services Berhad
