Fitch cuts PTT view to stable

Fitch Ratings said it revised the outlook on PTT plc's national rating to stable from positive and affirmed its national long-term rating at AA+(tha) and short-term rating at F1+(tha). The national long-term rating on PTT's outstanding debentures amounting to THB74 billion are affirmed at AA+(tha).

The change in view is based on a continuing large capital expenditure budget, downward revision of earnings projection to reflect delays in some projects and lower profit margins. These issues will result in a higher leverage than previously expected and extend the period of negative free cash flow generation, Fitch said.

The ratings are underpinned by the company's strong credit profile, reflecting its dominance in the gas and oil business in Thailand, its strategic importance and function as a policy vehicle for Thailand's energy security and development. PTT enjoys a natural monopoly in gas transmission and distribution through its established pipeline network, a secure demand via its long-term sales contracts and the high barriers of entry to its capital-intensive business.

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