Fitch confirms KEPCO's credit rating at BB- with a stable outlook

Kuwait Projects Company (Holdings) – KIPCO – announced that Fitch Ratings affirmed the company’s long-term issuer default rating at ‘BB-’ with a stable outlook. The assessment was based on KIPCO’s diversified investment portfolio, the stability of dividend distributions received from its investments across various economic cycles, its track record of generating long-term investment returns, and its financial flexibility. Fitch also assigned a ‘BB-’ credit rating to KIPCO’s updated Euro Medium-Term Note program, consistent with the company’s long-term issuer rating.

The affirmation comes despite challenging regional conditions. The agency noted that KIPCO’s diversified investment portfolio, which spans multiple sectors in the Middle East and North Africa, along with its flexibility, has helped mitigate the impact of regional developments on the asset valuations and operational performance of the group’s companies. Fitch also highlighted the group’s track record of divestments, its ability to influence the management of its companies, and the support it receives from its major shareholders as key factors underpinning the rating affirmation.

Fitch pointed to the credit strength of KIPCO’s two largest portfolio investments, Bank of Bahrain and Kuwait (Bahrain Bourse-listed) and Saudi Dairy and Foodstuff Company (SADAFCO), which together account for 41% of the total value of the investment portfolio. The agency also noted that many of the group’s companies hold leading positions in their respective markets.

Fitch praised KIPCO’s approach to effective portfolio management and its ability to reduce debt through strategic divestments. It explained that the sale of Gulf Insurance Group in 2024 and other divestments planned for 2025 have contributed to debt reduction and enhanced liquidity.

The agency also underscored KIPCO’s strong liquidity position, noting that the group’s cash balance stood at $1.1 billion, sufficient to cover debt maturities through early 2028. Fitch projected that the net debt-to-asset ratio would remain below 45% over the next four years, with potential decline toward the target level of 40% if asset valuations improve.

In this context, Mustafa Al-Shami, Chief Financial Officer of the KIPCO Group, said: “The affirmation of our credit rating amid challenging regional conditions clearly demonstrates the resilience of our diversified investment portfolio in facing challenges, as well as the disciplined financial approach underpinning our strategy.”

Al-Shami added: “Our focus on effective portfolio management, strategic divestments from certain assets, and prudent debt management has enhanced the group’s liquidity and financial flexibility, enabling us to navigate market volatility and meet our financial obligations. Furthermore, the rating of our updated Euro Medium-Term Note program strengthens our access to global debt markets. We will continue working to strengthen our financial position, improve the efficiency of our investment portfolio, and deliver sustainable long-term value for our shareholders.”