Post by account_disabled on Dec 26, 2023 3:30:29 GMT -5
Fitch Ratings (Thailand) Co., Ltd. has announced the long-term national credit rating for the Medium-Term Debenture Program of IRPC Public Company Limited (IRPC). A-(tha)/stable credit outlook) Total bond value not exceeding twenty-eight billion baht at the 'A-(tha)' level. Bonds issued under the said program will be unsecured and unsubordinated. They are not more than 30 years old and will be rated at the same level as the Company's long-term national credit rating. This is because such debentures have the same status as unsecured debt. and not subordinated to the rights of the Company Factors affecting credit rating High Leverage: Fitch expects IRPC's leverage to remain high in 2020-2022, with IRPC's net debt to operating cash flow before working capital changes increasing significantly.
Was 8.7 times in 2019 from 3.0 times Job Function Email Database in 2018 due to weak oil refining margins and product price spreads with raw materials for petrochemical products. The company had operating profit before interest, taxes, and depreciation. and amortization (EBITDA) decreased 68 percent and cash flow from operations before changes in working capital (FFO) decreased 73 percent. Fitch expects IRPC's leverage to continue increasing in 2020 ahead. to gradually falling to below 5x in 2022. Reduced demand from the impact of coronavirus will continue to pressure refining margins in the short term. Although refining margins are likely to improve over the next 2-3 years, in addition, the spread between product prices and raw materials for petrochemical products will be pressured by the expansion of large new production capacity in the petrochemical industry. Delay investment in paraxylene production project: IRPC has postponed investment decision in paraxylene (PX) production project to 2021.
The Company will reconsider its investment and shareholding proportion in this project. Therefore, Fitch has not yet considered including the investment costs of this project in Fitch's estimates. The project has an initial investment cost estimate of approximately $1.1 billion. However, if IRPC decides to invest in this project using borrowing money. The ratio of net debt to cash flow from operations before changes in the company's working capital. will be much higher than Fitch estimates. Fitch expects the company's capital expenditures in 2020-2022 to be similar to last year. At approximately 6 billion baht per year, which does not include the paraxylene production project. Most of the investment will be used for production improvement projects to support EURO 5 oil standards, Floating Solar projects, business expansion and maintenance costs. Extending the payment term: IRPC will extend the trading term for purchasing crude oil with PTT Public Company Limited.
Was 8.7 times in 2019 from 3.0 times Job Function Email Database in 2018 due to weak oil refining margins and product price spreads with raw materials for petrochemical products. The company had operating profit before interest, taxes, and depreciation. and amortization (EBITDA) decreased 68 percent and cash flow from operations before changes in working capital (FFO) decreased 73 percent. Fitch expects IRPC's leverage to continue increasing in 2020 ahead. to gradually falling to below 5x in 2022. Reduced demand from the impact of coronavirus will continue to pressure refining margins in the short term. Although refining margins are likely to improve over the next 2-3 years, in addition, the spread between product prices and raw materials for petrochemical products will be pressured by the expansion of large new production capacity in the petrochemical industry. Delay investment in paraxylene production project: IRPC has postponed investment decision in paraxylene (PX) production project to 2021.
The Company will reconsider its investment and shareholding proportion in this project. Therefore, Fitch has not yet considered including the investment costs of this project in Fitch's estimates. The project has an initial investment cost estimate of approximately $1.1 billion. However, if IRPC decides to invest in this project using borrowing money. The ratio of net debt to cash flow from operations before changes in the company's working capital. will be much higher than Fitch estimates. Fitch expects the company's capital expenditures in 2020-2022 to be similar to last year. At approximately 6 billion baht per year, which does not include the paraxylene production project. Most of the investment will be used for production improvement projects to support EURO 5 oil standards, Floating Solar projects, business expansion and maintenance costs. Extending the payment term: IRPC will extend the trading term for purchasing crude oil with PTT Public Company Limited.
