Fitch reaffirms PTT Chemical's positive rating

22 May 2007 08:54  [Source: ICIS news]

MUMBAI (ICIS news)--Fitch Ratings has reaffirmed its long- and short-term positive ratings on Thai major PTT Chemical (PTTCH) since it said the company is in a strong financial position.

 

After announcing the long-term "A+" and short-term "F1" ratings on PTTCH on Tuesday, the ratings agency said this was down to the company's strong liquidity profile that provided flexibility despite a period of major capacity expansion.

 

PTTCH had earlier announced capital expenditure plans for 2007-2011 including a large scale olefins expansion through a new gas-based cracker, improvement of existing plants and investments in downstream polymers and specialty chemicals.

 

PTTCH's ratings took into account the cyclical nature of the petrochemicals industry, execution risks arising from new projects, huge investment plans amid a less favourable operating environment and the company's relatively high exposure to a single market, the agency said.

 

The Thai major reported a strong performance in 2006, with a 28% rise in earnings year on year. This was largely driven by higher olefins and high density polyethylene (HDPE) sales volumes and strong product-to-feedstock margins owing to strong petrochemicals prices, PTTCH said.

 

By: Isha Jha
+65 6780 4359

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