TRIS Rating has upgraded the company and issue ratings of Ratchaburi Electricity Generating Co., Ltd. (RATCHGEN) to “AA+” from “AA” with “stable” outlook. The upgrade is based on the company’s demonstrated ability to provide better-than-expected operating performance and its strengthened cash flow protection. The ratings continue to reflect RATCHGEN’s stable cash flows generated under the long-term power purchase agreements (PPAs) with the Electricity Generating Authority of Thailand (EGAT), well-structured and state-of-the-art Ratchaburi power plant, as well as the company’s proven record of power plant management. The “stable” outlook reflects TRIS Rating’s expectation that RATCHGEN will continue to maintain the plant availability and operating performance levels in line with the targets set in the PPAs and will generate reliable revenues throughout the life of the PPA, ending 2025-2027.
RATCHGEN is a wholly-owned subsidiary of Ratchaburi Electricity Generating Holding PLC (RATCH), which is 45% owned by EGAT. RATCHGEN is the largest Independent Power Producer (IPP) in Thailand. Its power plant consists of two thermal units and three combined cycle gas turbine (CCGT) units, with total installed capacity of 3,645 megawatts (MW), representing 11% of Thailand’s total installed capacity at the end of 2012. RATCHGEN sells electricity to EGAT under 25-year PPAs and buys gas from PTT PLC under a 25-year gas sale agreement (GSA).
In 2012, the operating statistics of the RATCHGEN power plant were impressive. The CCGT units continued to outperform the targets, reaching an average plant availability level of 90.0% and a heat rate of 7,241 BTU/kWh. The thermal units could maintain an average availability level as high as 97.0% with a heat rate of 10,196 BTU/kWh. The dispatch levels for both the thermal and CCGT units in 2012 were 31.7% and 71.9%, respectively. These dispatch levels were higher than the levels achieved in 2011: 28.1% for the thermal units and 65.9% for the CCGT units. Although the dispatch level is lower than in the past, it have had little impact on the company’s net profit since net profit is driven mainly by the revenue RATCHGEN receives from Availability Payment (AP).
RATCHGEN’s electricity sales in 2012 increased by 25.7% to Bt51,794 million while its net profit increased by 18.9% to Bt4,867 million. The increase in net profit resulted from a lower corporate income tax rate, higher AP revenue as dictated in the PPAs, and some gain from Energy Payment (EP) revenue, as the plant’s efficiency level exceeded the target set in the PPAs. In 2012, RATCHGEN’s cash flow protection continued to improve, with earnings before interest, tax, depreciation, and amortization (EBITDA) stabilizing at approximately Bt9,000 million, compared with the declining debt from Bt22,831 million at the end of 2008 to Bt14,700 million at the end of 2012. The EBITDA interest coverage ratio improved from 7.5 times in 2008 to 16.9 times in 2012. The ratio of funds from operation (FFO) to total debt also rose, increasing from 36.2% in 2008 to 49.8% in 2012. The total debt to capitalization ratio improved from 51.6% at the end of 2008 to 40.0% in 2011 and 2012, in accordance with the debt repayment schedule. The last tranche of RATCHGEN’s outstanding debentures will mature in March 2015, 10 years before the end of the first PPA. ? Ratchaburi Electricity Generating Co., Ltd. (RATCHGEN) Company Rating: AA+ Issue Ratings: RG136A: Bt970.4 million senior debentures due 2013 AA+ RG139A: Bt1,006.8 million senior debentures due 2013 AA+ RG13DA: Bt1,006.8 million senior debentures due 2013 AA+ RG143A: Bt1,210.6 million senior debentures due 2014 AA+ RG146A: Bt1,271.3 million senior debentures due 2014 AA+ RG149A: Bt1,557.6 million senior debentures due 2014 AA+ RG14DA: Bt921.9 million senior debentures due 2014 AA+ RG153A: Bt721.4 million senior debentures due 2015 AA+ Rating Outlook: Stable
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