No impact on Thai corporate ratings: Moody's

THAI RATINGS NOT THREATENED BY FLOODS: MOODY’S

The Nation

Moody’s Investors Service does not see any impact on the ratings of Thai corporates as a consequence of the ongoing floods in Thailand.
“While the nine corporates we rate in Thailand have all been affected by the floods to varying degrees and in different ways, we do not expect the temporary pressures on their businesses to directly affect their ratings,” said Philipp Lotter, an associate managing director at Moody’s.
It estimates the damage from the disaster will exceed Bt200 billion, or 2 per cent of gross domestic product.
“Although the credit rating for Thailand is negative [Baa1 stable], we do not expect the deluge to undermine the government’s creditworthiness, which is supported by the robust economic recovery of the past three years, and the stabilisation of government finances,” Lotter added.
The ratings company said that it is unlikely the floods will directly affect the ratings of issuers in the energy sector as their power plants, refineries and petrochemical plants are located in areas which have been free from flooding so far.
Moody’s assigned ratings to nine Thai companies; six energy and utilities companies, one beverage company, and two telecommunications companies. They include Ratchaburi Electricity Generating Holding, PTT, PTT Exploration & Production, PTT Global Chemicals, IRPC and Thai Oil.
“These companies have adequate headroom to absorb the temporary setbacks caused by the flooding, as they have benefited from strong results in the earlier part of this year,” Lotter said.
However, Moody’s said the floods will hurt the profits of Thai Beverage due to lower sales volumes, combined with logistics and supplychain issues, but it is difficult to quantify the impact at the moment. However, ThaiBev’s liquidity position remains supported by its strong banking relationships and it may also benefit from a central bank commitment to ease financing terms for affected companies.
Finally, the impact on mobile operator True Move and fixed-line and broadband services provider True Corp’s wireless business has so far been quite small. Moody’s believes the companies have sufficient liquidity and cash balances to undertake precautionary measures to deal with the floods.