Connect with us

Companies

Asian refiners EBITDA will decline by around 30% says Moody’s

Moody’s Investors Service says in a new report that the aggregate EBITDA of Asian refiners will decline by around 30% in 2020

Published

on

opec extended oil output cut so eic sees some price increase in the latter half of 2017

Moody’s Investors Service says in a new report that the aggregate EBITDA of Asian refiners will decline by around 30%

  • Aggregate EBITDA will decline around 30% in 2020 on steep inventory losses and weak margins
  • A gradual economic recovery will improve margins in 2021, but risks are tilted to the downside

“EBITDA and margin will improve in 2021 as a gradual economic recovery results in higher refining margins and the absence of inventory losses leads to higher earnings. But risks to margin recovery are firmly tilted to the downside.”

Hui Ting Sim, a Moody’s Analyst.

“Margin recovery will be delayed if a resurgence in infections leads to renewed lockdowns. We’re also seeing higher market imbalance, with a surge in refining capacity continuing through 2022 driven by investments in Asia and the Middle East, which will further weigh on the extent of margin recovery,” adds Sim.

Among rated Asian refiners, some are better positioned than others to withstand weaker-than-expected refining margins. Moody’s expects ENEOS will be best positioned to maintain its credit quality, whereas HPCL-Mittal Energy Limited (HMEL, Ba2 negative), Thai Oil Public Company Limited (Baa2 negative) and SK Innovation Co. Ltd. (SKI, Baa2 negative) have lower buffers.

Most rated Asian refiners have close links with their respective government or have strong shareholders, hence their refinancing risk is low. Moody’s expects them to maintain strong access to funding given their good relationships with banks or track record of access to capital markets.

Moody’s report covers the nine refining and marketing companies across the region:

Bharat Petroleum Corporation Limited (BPCL, Baa3 negative)

ENEOS Holdings, Inc. (Baa2 stable)

GS Caltex Corporation (Baa1 stable)

Hindustan Petroleum Corporation Ltd. (HPCL, Baa3 negative)

HPCL-Mittal Energy Limited (HMEL, Ba2 negative)

Indian Oil Corporation Ltd (IOCL, Baa3 negative)

S-OIL Corporation (Baa2 stable)

SK Innovation Co. Ltd. (SKI, Baa2 negative)

Thai Oil Public Company Limited (Baa2 negative)

Subscribers can access the report “Refining & marketing – Asia: Coronavirus will exacerbate oversupply and keep refining margins weak” at: http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1212868

Siam News Network includes top references news sites, Job Board, Business Directory and Classifieds Portal

Click to comment

Leave a Reply

Corporate

True and Dtac Merger Talks Highlight Necessity of Scale at Thai Telcos

The merger between True Corporation, a subsidiary of conglomerate Charoen Pokphand Group, and Total Access Communication (Dtac), a subsidiary of Norway’s Telenor would shrink the number of big telcos players in Thailand to only two.

Published

on

iStock-1135535759.jpg

The discussion between Norway telecom group, Telenor ASA, and Thailand’s largest conglomerate, Chareon Pokphand Group (CP Group), to explore a merger of their telecom businesses in Thailand underscores the significance of scale to drive cost efficiencies amid the Thai telecom sector’s slow growth and high investment, says Fitch Ratings.

(more…)
Continue Reading

Press Release

Exclusive interview with Kulpreeya Buddharudisuk

Kulpreeya Buddharudisuk is a seasoned leader who joined Zoetis over seven years ago to lead the regional finance function for Southeast Asia, eventually leading all Asia Pacific countries. In this role, she successfully led multicultural, geographically diverse teams through a transformative time in the business. 

Published

on

By

a78fdbc6 kulpreeya buddharudisuk square

Kulpreeya Buddharudisuk is a seasoned leader who joined Zoetis over seven years ago to lead the regional finance function for Southeast Asia, eventually leading all Asia Pacific countries. In this role, she successfully led multicultural, geographically diverse teams through a transformative time in the business. 

(more…)
Continue Reading

Recent

Most Read

Join 14,210 other subscribers