Riyadh – Mubasher: Moody's Ratings has affirmed the ‘Baa3’ long-term issuer rating of Almarai Company and changed the outlook to positive from stable, according to a press release.
The agency also maintained the ‘Baa3’ rating on the company's $750 million backed senior unsecured sukuk EMTNs due in 2033 and ‘(P)Baa3’ rating on the backed senior unsecured trust certificate issuance (sukuk) programme.
Meanwhile, the outlook on Almarai Sukuk Limited has been changed to positive from stable.
Aziz Al Sammarai, a Moody's Ratings Assistant Vice President, commented: “The positive outlook reflects our expectation that Almarai will maintain strong operating and financial metrics over the next 12 to 18 months."
The positive outlook also reflects the company's increased scale in line with its planned SAR 18 billion investments over the next few years.
The rating could be upgraded if Almarai's margins were to stabilise close to the mid-teens level. The rating could also be upgraded if the company maintains its financial leverage below 2.5x, with Moody's adjusted retained cash flow (RCF)/net debt above 30%.
On the other hand, the Saudi firm could face a downgrade if Moody's adjusted debt/EBITDA increases towards 3.5x or Moody's adjusted RCF/net debt decreases to below 20% for an extended period.
In the first half (H1) of 2024, the Tadawul-listed company posted 10.04% year-on-year (YoY) higher net profits at SAR 1.31 billion, compared to SAR 1.19 billion.
