Doha - Mubasher: Moody's Investors Service, (Moody's)said it affirmed Qatar domiciled telecommunication services provider Ooredoo A2 long-term issuer rating reflecting EBITDA margin improvements post-implementation of its rationalization strategy.
As part of the rating action, Moody's also affirmed the A2 senior unsecured ratings of Ooredoo's wholly owned finance vehicle, Ooredoo International Finance Limited (OIF); and the A2 senior unsecured rating of Ooredoo
Tamweel Limited.
The outlook on all the ratings has been changed to stable from negative, said Moody's .
"The affirmations with a stable outlook reflect Moody's view of Ooredoo's credit metrics being restored back to levels commensurate with its baa2 baseline credit assessment or standalone alone rating, which exclude any
potential uplift from the Government of Qatar, its majority owner," said Douglas Rowlings, Assistant Vice President at Moody's.
"We expect with the traction being realised on Ooredoo's rationalisation strategy that EBITDA margins will be sustained above 45% and that net debt/EBITDA will trend below 2x over the next two years. Free cash flow
will likely also improve as capital expenditure spend tapers off and cost savings are realized across the group," added Rowlings.
Moody's recognizes that Ooredoo is entering the next phase in its development, shifting away from further international expansion and focusing its attention on a now well-established portfolio of operations.
The rating agency expects that Ooredoo's credit profile will continue to strengthen as management executes further efficiency gains, additional centralising of group procurement, cash conservation and deleveraging
delivery.
