Tassnief assigns BBB- (pi) rating to Saudi German Health

The rating reflects a moderate credit profile and that Saudi German Health possesses adequate creditworthiness, indicating overall low credit risk

Simah Rating Agency (Tassnief) assigned Middle East Healthcare Co. (Saudi German Health) a preliminary long-term credit rating of BBB- (pi).

The agency said the rating reflects a moderate credit profile, with Saudi German Health demonstrating adequate creditworthiness and an overall low credit risk. It noted, however, that the company’s risk profile could face moderate volatility in response to changes in economic and sector conditions.

Tassnief highlighted that the rating supports the company’s reputation, citing key factors such as solid geographic diversification compared with peers and an improving market position.

The agency added that the healthcare services sector is considered low risk due to limited cyclical demand and favorable economic and demographic trends in Saudi Arabia. Regulatory risks remain, given the importance of affordable healthcare, while other challenges include human capital shortages and rising competition in the private sector.

It also noted that high geographic concentration, especially in the Riyadh region, is expected to intensify competition among private healthcare providers.

The assessment of the company’s financial risk profile reflects relatively low net profitability compared with peers, despite continued revenue growth. Trade receivables are high relative to sales, resulting in a longer working capital cycle, Tassnief said.

The agency added that the company’s use of both long- and short-term debt has produced a moderately leveraged capital structure. Nevertheless, it said Saudi German Health’s ability to service debt through internal cash flows remains adequate.

Tassnief said the ratings remain conditional on continued revenue growth driven by ongoing expansion initiatives and improved net profitability. A reduction in receivables and a more efficient working capital cycle would further support the rating. Debt metrics and debt service coverage ratios will be closely monitored for any signs of weakening financial flexibility.