Credit rating downside may occur if RATCHGEN’s financial leverage increases dramatically due to any large-scale, debt-funded investment.
RATCHGEN is a wholly-owned subsidiary of Ratchaburi Electricity Generating Holding PLC (RATCH) which is rated “AAA” by TRIS Rating. RATCHGEN is the largest Independent Power Producer (IPP) in Thailand. At the end of 2014, RATCHGEN owned and operated two power plants located in Ratchaburi province, with the total capacity of 4,345 megawatts (MW) or accounted for 13% of Thailand’s total installed capacity. The Ratchaburi power plant consists of two thermal units and three combined cycle gas turbine (CCGT) units, with a total installed capacity of 3,645 MW. The 700-MW Tri Energy power plant was transferred to RATCHGEN on 1 August 2014. The Ratchaburi power plant sells electricity to EGAT under 25-year PPAs and buys natural gas from PTT PLC (PTT) under a 25-year gas sale agreement (GSA), while the Tri Energy power plant holds 20-year PPA with EGAT and 20-year GSA with PTT.
In 2014, the operating statistics showed that RATCHGEN’s power plants outperformed the targets. The equivalent availability factor (EAF) of the thermal units at Ratchaburi power plant was 99.4%, better than the PPA target of 95.4%. The high EAF indicated that the thermal units realized the full amount of the Availability Payment (AP). The heat rate of the thermal units was 10,352 BTU/kWh (British thermal unit per kilowatt hour), lower than the PPA target of 10,361 BTU/kWh. The CCGT units also outperformed the targets set in the PPA, reaching an average plant availability level of 90.3% and a heat rate of 7,178 BTU/kWh. The dispatch levels for both the thermal and the CCGT units in 2014 were 22.8% and 67.6%, respectively. The performance of the Tri Energy power plant was in line with the PPA targets, with an EAF of 88.9% and a heat rate of 7,055 BTU/kWh.
RATCHGEN’s revenue in 2014 rose by 5.3% to Bt48,822 million, from Bt46,353 million in 2013. The increase was mainly due to higher AP revenue, as structured in PPA, and the contribution from the Tri Energy power plant.
RATCHGEN’s capital structure was satisfactory. At the end of 2014, the company’s total debt was Bt14,225 million, with a total debt to capitalization ratio of 35.7%. The total debt consists of short-term loan from RATCH worth about Bt8,700 million, loans from banks of about Bt4,800 million, and debentures of Bt721 million. RATCHGEN’s cash flow protection is strong. For 2014, the company’s earnings before interest, tax, depreciation and amortization (EBITDA) was Bt9,449 million, rising by 7.5% from Bt8,790 million in 2013. The EBITDA interest coverage ratio was 18.4 times in 2014. The ratio of funds from operations (FFO) to total debt was 55.8% in 2014.
Ratchaburi Electricity Generating Co., Ltd. (RATCHGEN)
Company Rating: AAA
Rating Outlook: Stable