TRIS Rating has affirmed the company and issue ratings of Ratchaburi Electricity Generating Co., Ltd. (RATCHGEN) at “AA+” with “stable” outlook. The ratings 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 in line with the PPA targets. TRIS Rating also expects RATCHGEN to generate a reliable stream of revenue throughout the life of the PPAs, ending from 2025-2027.
RATCHGEN is a wholly-owned subsidiary of Ratchaburi Electricity Generating Holding PLC (RATCH) which is rated “AA+” by TRIS Rating. 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 2013. RATCHGEN sells electricity to EGAT under 25-year PPAs and buys natural gas from PTT PLC (PTT) under a 25-year gas sale agreement (GSA).
In 2013, the operating statistics of RATCHGEN’s power plant were satisfactory. The thermal units had a major overhaul in 2013, which lowered the availability level from 97.0% in 2012 to 81.9% in 2013. However, this level was still in line with the PPA’s target. The heat rate of thermal units was 10,359 BTU/kWh. The CCGT units continued to outperform the targets set in the PPA, reaching an average plant availability level of 88.3% and a heat rate of 7,246 BTU/kWh. The dispatch levels for both thermal and CCGT units in 2013 were 28.5% and 70.7%, respectively. These dispatch levels were lower than the levels in 2012 at 31.7% for thermal units and 71.9% for CCGT units. Lower dispatch level typically has little impact on the company’s cash flows since RATCHGEN’s earnings before interest, tax, depreciation and amortization (EBITDA) are mainly generated by Availability Payment (AP) revenue.
RATCHGEN’s electricity sales in 2013 dropped by 7.4% to Bt47,945 million mainly due to lower Energy Payment Revenue (EP) from a decrease in electricity generation. The company’s net profit dropped by a smaller percentage, at 2.1%, to Bt4,765 million, as profitability was mainly driven by AP revenue. In 2013, RATCHGEN’s cash flow protection continued to improve, as total debt decreased from Bt14,700 million at the end of 2012 to Bt12,090 million at the end of 2013. The EBITDA interest coverage ratio improved from 16.9 times in 2012 to 18.2 times in 2013. The ratio of funds from operations (FFO) to total debt also rose from 49.9% in 2012 to 58.2% in 2013. The total debt to capitalization ratio improved from 41.4% at the end of 2012 to 36.7% at the end of 2013, in accordance with the debt repayment schedule. RATCHGEN is expected to pay down its last tranche of debentures, worth Bt721 million, in March 2015.
TRIS Rating Co., Ltd./www.trisrating.com Contact: santaya@trisrating.com, Tel: 0-2231-3011 ext 500/Silom Complex Building, 24th Floor, 191 Silom Road, Bangkok 10500, Thailand Copyright 2014, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information. All methodologies used can be found at http://www.trisrating.com/en/rating_information/rating_criteria.html.