Tassnief assigns A- (pi) rating to Al Hammadi

Logo of Al Hammadi Holding

Simah Rating Agency (Tassnief) assigned Al Hammadi Holding Co. a preliminary long-term credit rating of A- (pi).

In its report, the agency stated that the rating reflects a strong credit history, noting that Al Hammadi maintains high creditworthiness with very low credit risk.

It added, however, that the company’s risk profile may shift in response to changes in economic and sectoral conditions.

The report also highlighted that the rating reflects the company’s current market position relative to other major players in the sector. It indicates moderate business risk and a satisfactory financial risk profile.

The rating further incorporates an assessment of the company’s corporate governance framework, which is generally satisfactory, with potential for enhancement through more comprehensive internal control and risk management practices.

Tassnief noted that the healthcare services sector is considered low-risk due to stable demand and favorable economic and demographic trends in Saudi Arabia. However, the sector faces regulatory risks tied to the importance of affordable healthcare, in addition to commercial risks such as shortages of human capital and intense competition, particularly within the private sector.

The agency added that the company’s significant geographic concentration—particularly in the Riyadh region—is expected to heighten competition among private healthcare providers.

According to the report, Al Hammadi’s financial position has been negatively affected by limited revenue and profitability growth, as well as rising trade receivables, which have lengthened the working capital cycle.

Nonetheless, capital indicators remain strong: the financing ratio (interest-bearing debt to equity) stood at 0.21x at the end of 2024, compared to 0.23x a year earlier. The company’s ability to cover current debt obligations with cash flows is also considered comfortable.

Tassnief concluded that maintaining the rating will depend on strengthening the company’s market position and successfully implementing its business strategy, while sustaining recent improvements in profitability, liquidity, and capital adequacy metrics.