Tassnief issues credit rating for Alkhorayef Water

Logo of Alkhorayef Water and Power Technologies Co.

Simah Rating Agency (Tassnief) issued, on Sept. 5, its credit rating for Alkhorayef Water and Power Technologies Co. at “A-” for the long term and “T-3" for the short term, with a “Stable” outlook.

The credit rating agency, in a statement received by Argaam, explained that these ratings reflect the company's strong credit profile, as well as its high creditworthiness (i.e., its low credit risks). It also noted that the risk profile may change with fluctuations in economic and sectoral conditions.

It also emphasized that these ratings are based on the company's position in the water infrastructure market, influenced by the high competitiveness and cyclical nature associated with the contracting industry.

Tassnief further added that the financial risk rating assessment includes increasing revenues, with satisfactory, yet low, margins. It noted that financial leverage indicators imply a growing trend that is currently manageable, amid an improving working capital cycle and a healthy cash balance.

The rating assessment, however, would remain contingent on enhancing the company’s market position and margins as well as the diversification of operations. It clarified that maintaining financial stability in terms of leverage and coverage is crucial.