Moody's affirms Almarai's 'Baa3' rating, revises outlook to ‘positive’

Logo of Almarai Co.

Moody's Investor Service affirmed Almarai Co.'s “Baa3” rating, revising the outlook from “Stable” to “Positive”.

The rating agency also affirmed the “Baa3” rating on the $750 million sukuk due in 2033 and the (P)Baa3 rating for Almarai's sukuk program, upgrading both outlooks to “Positive” from “Stable”.

"The positive outlook reflects our expectation that Almarai will maintain strong operating and financial metrics over the next 12 to 18 months,” said Aziz Al Sammarai, Assistant VP at Moody's.

The positive outlook also reflects the company's increased scale, track record of deleveraging, and continued product and geographic expansion.

The outlook also considers the company's planned SAR 18 billion investments over the next few years, which will pressure the negative free cash flow generation through 2026, Al Sammarai noted.

A track record of higher earnings as these investments are executed will be key for upgrading the ratings, the rating agency said.