Atlas Elevators gets ‘BB’ rating by Tassnief

Logo of Atlas Elevators General Trading & Contracting Co. 

Atlas Elevators General Trading & Contracting Co. obtained an initial “BB” (pi) long-term credit rating from Simah Rating Agency (Tassnief), and a “T-5” short-term credit rating.

The “BB” rating reflects low creditworthiness and high credit risk, noting that the risk profile may fluctuate significantly with changes in economic and sectoral conditions, the company said in a statement.

Atlas Elevators explained that the ratings reflect its extensive experience in the escalator and elevator sector. The company has delivered more than 15,000 projects, including overseas operations, and currently has more than 10,000 maintenance contracts and a customer base exceeding 25,000.

In addition to its overseas operations, Atlas Elevators has established partnerships with Hyundai Elevator, Sodimas, Delfar, TK Access Limited, Hidral, PVE, and Terry Lifts.

Tassnief expects the Saudi elevator and escalator sector to grow by more than 10% between 2023 and 2029. Key growth drivers for the sector include Vision 2030 initiatives (such as smart cities and economic zones), urban expansion and population growth, as well as tourism and healthcare projects under Vision 2030.

However, Atlas Elevators may face several challenges, including the timely implementation of ongoing construction projects and the growing demand for sustainable solutions, Tassnief said.

Furthermore, the company’s financial risk profile may be constrained by stagnant revenues, despite maintaining good profitability, and a good capital profile in relation to the operations size and the large inventory on the balance sheet that restricted the working capital cycle.

There is justification for a special focus on inventory management in order to prevent pressure on the company's liquidity profile, the rating agency said.

Adding new projects to the order book supports revenue growth and enhances the scope of operations, which will strengthen the company's credit rating. Furthermore, the company's ability to mitigate its business volatility and financial risks through the successful implementation of diversification efforts, along with a strong focus on inventory management, will be critical.