Fitch affirms PTT

Fitch Ratings said it affirmed Thailand-based PTT PCL's national senior unsecured long- and short-term debt ratings at AA+(tha) and F1+(tha), respectively, and the national ratings on PTT's outstanding debentures amounting to Thai baht 58 billion at long-term AA+(tha).

The outlook is positive.

Fitch said PTT's ratings reflect 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, its majority state ownership and strong support, good senior management track record and solid cash flow generation.

The ratings also take into account significant budgeted capital expenditure, volatile commodity prices, forex exposure and regulatory and political risks, the agency said. Recent evidence of the latter was the government's direction to PTT to reduce gas prices to EGAT PCL and independent power producers.

The positive outlook reflects stronger-than-expected earnings due to rising oil prices and expectations that PTT will use its surplus cash to reinforce its core business while maintaining a conservative financial profile.

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