Tassnief maintains ‘AAA’ long-term rating for stc

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Sima Rating Agency (Tassnief) maintained its long-term entity rating of “AAA” and short-term entity rating of “T-1” assigned to telecom operator stc. The outlook on the rating is “Stable”.

The long-term rating of ‘AAA’ denotes the highest creditworthiness and minimal credit risk, relative to other issuers or obligations in the Kingdom of Saudi Arabia. Meanwhile, the short-term rating indicates the strongest capacity for timely payment of financial commitments relative to other issuers or obligations, the agency added, in a statement.

stc’s AAA rating incorporates robust operating and financial performance and expected continuity in the same over the rating horizon. Key rating considerations include the company’s leading market position as an ICT conglomerate, strong franchise, and extensive network infrastructure, it added.

The ratings consider stc's low business risk profile, strong balance sheet, conservative financial policy, low leveraged capital structure and abundant liquidity (cash & cash equivalents and investments), which provide the company with financial flexibility and are key rating drivers.

Tassnief also highlighted stc’s focused efforts to enhance diversification through acquisitions and organic growth, adding that, given the healthy cash buffers, stc’s credit rating matrix is expected to remain sound even if the company proceeds with any further investment or acquisition.