Moody's Assigns 'A1' Credit Rating to Samsung SDS

[Asia Economy Reporter Koh Hyung-kwang] International credit rating agency Moody's has newly assigned Samsung SDS a corporate credit rating of 'A1'. The rating outlook is 'stable'.

On the 25th, Moody's stated, "The high business and financial stability based on the large domestic demand from Samsung Group affiliates, the company's leading market position in the domestic IT service market, and the company's very strong financial structure and cash flow support Samsung SDS's standalone creditworthiness," evaluating it as such.

Moody's explained, "The large domestic demand from Samsung Group affiliates, especially Samsung Electronics, is a factor supporting Samsung SDS's high business stability," adding, "Last year, Samsung SDS's sales from Samsung Group affiliates accounted for 84% of total sales, with Samsung Electronics and its subsidiaries accounting for 71%."

Furthermore, Moody's added, "Considering that Samsung Group affiliates have long relied on Samsung SDS for the construction, upgrade, and maintenance of core IT systems and logistics processes, it is judged that a significant portion of the aforementioned domestic volume occurs repeatedly."

Additionally, Moody's predicted, "Samsung SDS's sales, which showed some weakness in the first half of this year due to disruptions caused by the spread of the novel coronavirus infection, are expected to grow at a mid-to-high single-digit rate over the next one to two years," and "Samsung SDS's sales growth will be driven by increased IT investments from companies and the government to implement cloud and digital innovation strategies."