No direct impact on Thai refiners' ratings from floods - Moody's

04 November 2011 04:50  [Source: ICIS news]

SINGAPORE (ICIS)--Ratings firm Moody's Investors Service said on Friday it does not see any impact on its ratings of major refiners in Thailand as a result of ongoing floods in the country that are threatening to significantly slash economic growth this year.

Thailand’s central bank last week slashed its 2011 economic growth forecast for the country to 2.6%, from a previous estimate of 4.1%, as floods began overwhelming the capital of Bangkok.

The floods have killed more than 427 people across Thailand since heavier-than-usual monsoon rains began lashing the country in mid-July.

"While the nine corporates we rate in Thailand have all been affected by the floods to varying degrees and in different ways, we do not expect the temporary pressures on their businesses to directly affect their ratings," said Philipp Lotter, associate managing director for south/southeast Asia at Moody’s.

The nine include six energy and utility companies, one beverage company, and two telecommunications companies, the ratings agency said in a statement.

This includes southeast Asian oil and gas major PTT Group and its subsidiary PTT Exploration and Production as well as PTT’s affiliate firms PTT Global Chemicals, Integrated Refinery Petrochemical Complex (IRPC) and Thai Oil, according to Moody’s.

"These companies have adequate headroom to absorb the temporary setbacks caused by the flooding, as they have benefited from strong results in the earlier part of this year," Lotter said.

Thailand's worst flooding in 50 years is unlikely to directly affect the ratings of issuers in the energy sector as their power plants, refineries and petrochemical plants are located in areas which have so far been free of flooding, according to Moody’s.

Thailand’s petrochemical hub of Map Ta Phut in Rayong province lies safely on the eastern coast of the country.

Meanwhile, a fifth of Bangkok is now under water as floodwaters spread through the capital, the Bangkok Metropolitan Administration (BMA) said late on Thursday, amid fresh warnings to evacuate areas threatened by the flood.

While the centre of the capital remains dry, some northern and western parts have been swamped by floodwaters, according to media reports.

Moody's estimates that the damage from the disaster will exceed Thai baht (Bt) 200bn ($6.53bn), or 2% of Thailand’s GDP.

($1 = Bt30.63)

By: Nurluqman Suratman

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