Riyadh: Tassnief has upgraded the long-term entity rating of Ejada Systems Company (Ejada) from ‘A’ (Single A) to A+ (Single A Plus) while short-term rating has been maintained at T-2. The outlook on the rating is “Stable”. The long-term rating of ‘A+’ denotes robust creditworthiness and very low credit risk. Risk profile may vary with changes in economic and sector conditions.

Rating Rationale: The assigned ratings incorporate Edaja’s strong sponsor profile, improving governance framework, proven track record of specialized expertise in delivering tailored IT solutions, positioning as a digital orchestrator with growing market share, manageable concentration risk, and growing revenue profile. The ratings also factor in strengthening of profitability profile, sound liquidity position, and low leverage indicators with growing equity base.

Ejada operates across a diverse range of business lines, offering a comprehensive suite of services tailored to address the entire domains of the IT landscape. These include enterprise IT applications, data & analytics, mobility & customer experience, cloud services, cybersecurity, software solutions, and emerging technologies (Artificial Intelligence and Internet-of-Things). Ejada recorded healthy growth in revenues of 44% and 65% during 2023 and 1H2024, respectively. This along with the increase in margins due to improving business mix and cost optimization initiatives has resulted in strong growth in cash flow generation. Moreover, the Company’s low leverage capital structure, efficient working capital cycle and healthy cash balances provide Ejada with financial flexibility and support its ratings.

Rating Triggers: Ratings remain dependent on maintaining a conservative financial policy and low business & financial risk profile. Further strengthening market position and enhancing absolute quantum of cash flow generation will remain key rating triggers.

About the Company: Ejada Systems Company is a Saudi Closed Joint Stock Company registered in the Kingdom of Saudi Arabia. Al Rajhi Bank is the largest shareholder in the Company holding 86% shareholding while the remaining 14% shareholding is owned 10% by Al Jazira bank and 4% by Walaa Alghad fund, respectively.

For further information on this rating announcement, please contact Mr. Talha Iqbal (Ext. 6627) at email at RS@Tassnief.com.

RELATED CRITERIA AND METHODOLOGY
Rating Methodology for Corporate (v.2. 2019) can be found on the website: www.tassnief.com