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Fitch Ratings: Thai corporate earnings improve across sectors

Fitch Ratings: Thai corporate earnings improve across sectors

The report painted a mixed picture of the recovery in corporate earnings across sectors: Corporate earnings are improving, but leverage remains high due to significant investments.

The event also discussed asset allocation strategies and credit investment framework, and provided valuable insights into Thailand’s institutional outlook for post-pandemic recovery and long-term strategic investments.

Obboon Thirachit, senior director of corporate ratings at Fitch Ratings, said: Fitch Ratings highlighted that the steady recovery in tourism and the resumption of public spending supported earnings growth for companies in the aviation, accommodation and building materials sectors.

“Lower fuel costs also benefit the energy and utilities sectors, but higher renewable energy investment could further increase the already high leverage in utilities,” he said.

Meanwhile, the oil and gas sector is expected to see moderate gains from a high base in line with softening oil and gas prices, but should remain strong with healthy profits overall. Conversely, weak global economic conditions and new supply are holding back the recovery in the petrochemical sector.

Fitch-rated Thai corporate issuers have demonstrated prudent cash flow management during the Covid-19 pandemic, but the outlook points to increased investment and acquisitions, particularly in the oil and gas sector, he noted.