Dar Al Arkan Announces that Moody's credit rating agency has upgraded its outlook to positive from stable while reconfirming its corporate credit rating at (B1) following a recent review of DAAR's performance.
Moody's explained in their media release dated 5 March 2018 that upgrading DAAR outlook to positive from stable reflects the company's improved financial position following a strong set of results in the second half of 2017 coupled with SAR3.2 billion of unrestricted cash at year end materially reducing risks of financing upcoming liabilities.
Moody's also noted that the rating is underpinned by (1) the positive long-term fundamentals for the real-estate sector in Saudi Arabia, including favourable demographics, growth in household formation and a housing deficit; (2) significant value in assets with development assets held at a book value of SAR14.7 billion and investment properties at a book value of SAR3.3 billion relative to SAR 6.4 billion of reported debt as of YE2017 and (3) demonstrated track record of following a prudent financial policy including building up cash buffers ahead of upcoming debt maturities.