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Moody’s affirms the ratings of Saudi Telecom and Saudi Electricity, withdraws BCAs

RIYADH: Two Saudi companies have had their A1 ratings reaffirmed by Moody’s Investors Service in a boost for the Kingdom’s economic strength.

The ratings agency said the rating given to Saudi Telecom Co. — also known as stc — reflected its solid financial profile, while Saudi Electricity Co’s grading reflects the company’s continued strategic importance to the Kingdom’s Public Investment Fund, and the government in general.

The PIF fully owns SEC, while it owns 64 percent of stc.

Moody’s has withdrawn stc’s a1 baseline credit assessment, as it is no longer classifying the companies as Government-Related Issuers, or GRIs.

This comes after Moody’s assignment of ratings to the PIF at A1 stable.

The removal of the GRI status has no rating implications on stc and SEC and their ratings have been affirmed accordingly.


Moody’s Investors Service added that stc has a leading position in the domestic market, with a market share of around 70 percent, and a strong earnings before interest, taxes, depreciation, and amortization margin in the 35-40 percent range on a consistent basis.

The firm also has strong liquidity despite high dividend payments.

stc is the leading integrated telecommunications and ICT service provider in Saudi Arabia, and it also operates in Bahrain and Kuwait, and through an associate in Malaysia.

The report warned that the rating of the company could be affected if it sought to enter into other markets, saying: “Any increase in scale outside of Saudi Arabia, in markets with lower sovereign ratings or where the regulatory framework is less supportive compared to Saudi Arabia, could result in the company diluting the benefit of its strong and leading position in its domestic market.”

The company reported total revenue of SR63.4 billion ($16.9 billion) and a net profit of SR11.6 billion in 2021.


SEC’s standalone assessment is supported by the low business risk profile of its integrated electricity activities and its dominant market position in the Kingdom. It is also supported by the continued ongoing support from the government including fuel and other forms of subsidies.

SEC’s A1 rating also reflects a growing debt load as substantial investments are incurred to meet the growing demand for electricity in Saudi Arabia, according to Moody’s.

SEC is the dominant vertically integrated electricity utility in the Kingdom, and serves over 10.4 million customers as of Sept. 30, 2021. 

The state-owned company owns 42 major plants with a generation capacity of 54.5 gigawatts and has interest in joint ventures with generation capacity of a further 15.6 GW, representing the vast majority of Saudi Arabia’s generation capacity. 

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