Tassnief rates Mobily, Zain KSA

Telecom tower

Simah Rating Agency (Tassnief) assigned Etihad Etisalat Co. (Mobily) 'AA- (pi)' rating on the long-term and "T-2" on the short-term. Meanwhile, it assigned Mobile Telecommunication Company Saudi Arabia (Zain KSA) 'A (pi)' and 'T-2' on the long and short-terms, respectively.

The rating reflects Mobily's position in the market, as well as its satisfactory network coverage, appropriate business risks, and strong financial risk profile. The ratings include a strong corporate governance framework supported by a sound internal control framework and good strategic development planning.

Mobily's cash flow covered the existing debts, while Zain KSA's cash flows increased from 29% in 2019 to 49% in 2022. In addition, the generation of free cash flows witnessed healthy growth.

According to the report, Zain KSA's rating reflects its subscriber base, satisfactory network coverage, as well as an appropriate financial and commercial risk profile. The ratings also include a strong corporate governance framework supported by a sound internal control framework, well-prepared strategic planning, as well as an orientation towards transparency and disclosure.

The long-term ratings of the two companies reflect their strong credit profile, as they show that both telcos have very high creditworthiness and therefore low credit risks. The risks, however, may vary as per economic / sectoral changes.

The unsolicited ratings referred to as 'pi' do not reflect an outlook and are reviewed annually based on the most recent financial statements. However, they may be reviewed previously in the event of a major event that may affect the credit quality of the rated entity.