Fitch trims IRPC

Fitch Ratings said it downgraded IRPC PCL's national long-term rating, senior unsecured rating, and the ratings on its Thai baht 40 billion and Thai baht 42 billion medium-term debenture programs and its senior unsecured debentures to BBB+(tha) from A-(tha).

“The downgrade reflects our expectation that IRPC's EBITDA net leverage will remain elevated as weak margins affect operating cash flow. Fitch expects IRPC's EBITDA net leverage to remain above 5.5x for the next two to three years. The high leverage stems from the slower recovery in EBITDA than we had expected, due to challenging conditions in IRPC's petrochemical segment,” the agency said in a press release.

Fitch said it expects IRPC’s EBITDA to recover to Thai baht 8.3 billion in 2024 from Thai baht 5.2 billion in 2023, and to Thai baht 10.9 billion in 2025. These numbers would result in EBITDA net leverage staying high at about 8.5x in 2024 and decreasing to 5.8x in 2025, although the agency expects the company to cut capital expenditures and keep credit terms to 90 days on its crude purchase in 2025.

The outlook is stable.

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