The Ausdrill Limited (ASX: ASL) share price has been booming this year, climbing from $1.27 in mid-May to close on Wednesday at $2.18.
And the outlook for the mining and energy services company, with a market cap of $783.6 million looks bright after the S&P Global Ratings Agency (S&P) upgraded its corporate credit rating.
S&P notched up Ausdrill's issuer credit rating to BB- from B+. The mining services company's rating on senior unsecured notes was also up by one notch to BB- from B+. And the senior secured debt rating was upgraded to BB+ from BB.
"The outlook is stable, reflecting our view that Ausdrill will maintain the growth of its contract book and successfully execute its newly secured African projects," S&P stated.
The S&P ratings upgrade follows a Moody's Investor Services upgrade announced earlier this week.
"The ratings upgrade reflects Ausdrill's sustained improvement in its credit profile and our expectation that earnings will continue to grow, driven by opportunities in both open pit and underground mining services in Africa," according to Shawn Xiong, a Moody's Analyst.
In FY17, 52% of Ausdrill's revenue was generated in Africa and Moody's expects the share to increase to the range of 60%-65% over the next 12-18 months, according to the investor services company.
In August, Ausdrill announced it had achieved an after tax profit from continuing operations in FY17 of $31.4 million, up 53.3%.
And the company stated revenues had jumped 4.5% to $776.3 million.
Ausdrill's Managing Director, Mr Ron Sayers, said over the past 12 months his company won $1.6 billion worth of new projects and contract renewals.
"This includes four significant new jobs in Africa and the renewal of three key contracts in Australia," Mr Sayers said.
"Our project pipeline is exceptional and with our deep and long-standing relationships with the major mining companies operating in both Australia and Africa, Ausdrill is in a very strong position to continue to deliver growth in the years ahead, in what remains a challenging but stabilising market."
