Al-Mazaya as­signed Cor­po­rate Rating of ‘BBB-’ long-term CI also as­signs ‘A3’ short-term with ‘Sta­ble’ Out­look

Kuwait Times - - BUSINESS -

Cap­i­tal In­tel­li­gence Rat­ings, the renowned in­ter­na­tional credit rating agency, has as­signed Al-Mazaya Hold­ing Com­pany cor­po­rate rat­ings of ‘BBB-’ for the long-term and ‘A3’ in the short-term.

In its ini­tial re­port, the in­ter­na­tional agency in­di­cated that the out­look on Al-Mazaya Hold­ing Com­pany’s rat­ings is ‘Sta­ble’. The rat­ings are sup­ported by the Group’s well-di­ver­si­fied busi­ness model, its good liq­uid­ity backed by cur­rent high cash bal­ances, and by its sound prof­itabil­ity. Fur­ther sup­port­ing the rat­ings is the long-term na­ture of the com­pany’s fund­ing struc­ture and the sound EBIT fi­nance charge cov­er­age ra­tio.

Com­ment­ing on the pos­i­tive rating, Eng. Ibrahim Al-So­qabi, Group CEO of Al-Mazaya Hold­ing Com­pany, said: “Al-Mazaya Hold­ing boasts a re­silient fi­nan­cial position that is nim­ble enough to man­age all the com­pany’s short­term and long-term lever­age. As such, the com­pany is keen to ful­fill the re­quire­ments of its in­vestors and share­hold­ers by bridg­ing the in­for­ma­tion gap and pro­vid­ing them with seam­less ac­cess to com­pre­hen­si­ble, user-friendly and au­then­tic data with re­gards to risk man­age­ment. The ul­ti­mate goal is to build con­fi­dence and en­sure trans­parency.”

He added: “The new pos­i­tive rating should en­cour­age in­vestors and fi­nan­cial in­sti­tu­tions to ac­cel­er­ate co­op­er­a­tion with Al-Mazaya Hold­ing and launch mul­ti­fac­eted in­vest­ments and busi­ness en­ti­ties.”

His state­ment served to un­der­line the com­pany’s tire­less de­vel­op­ment ef­forts to op­er­ate ac­cord­ing to a dy­namic, sta­ble busi­ness model that is likely to yield high re­turns at ac­cept­able levels of risks and ul­ti­mately con­sol­i­date the com­pany, po­si­tion­ing it for fu­ture growth.

More­over, ac­cord­ing to the re­port, the rat­ings are also backed by the di­ver­si­fi­ca­tion that the com­pany has achieved within the as­set base and in rev­enue streams. While rev­enue streams are real es­tate-re­lated, they are di­ver­si­fied by ge­og­ra­phy, vary­ing be­tween de­velop-for-sale and rental prop­er­ties. The re­port also high­lighted the fairly com­fort­able debt to eq­uity ra­tio and the fact that this debt has a largely medium-to-long ma­tu­rity pro­file. The com­pany’s short-term debt is fully cov­ered by cash and other liq­uid as­sets at present.

In terms of non-fi­nan­cial fac­tors, the re­port men­tioned that the Group has a well-de­vel­oped strate­gic plan and a very de­tailed multi-year busi­ness strat­egy that is sub­ject to a quar­terly re­view - the re­port is then up­dated if re­quired. More­over, there are clear poli­cies and tar­gets in place that in­clude rais­ing the pro­por­tion of in­come com­ing from rental activities, fur­ther di­ver­si­fy­ing the com­pany’s port­fo­lio in terms of ge­og­ra­phy or real es­tate and es­tab­lish­ing a family of Al-Mazaya Group brands.

The re­port lauded the com­pany’s fi­nan­cial re­sults for the year 2016, stat­ing that the cur­rent year is a good one for the Group in terms of both net profit and cash gen­er­a­tion - both cat­e­gories are grow­ing sig­nif­i­cantly, es­pe­cially the cash bal­ance from sales of com­pleted units. The re­port also hailed the com­pany’s fall­ing lever­age and ris­ing rental in­come, not­ing that the ex­pec­ta­tion is for net profit at­trib­ut­able to share­hold­ers to be main­tained in 2017,with over­all net prof­its pre­dicted to rise in 2018.

Eng Ibrahim Al-So­qabi

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.