Thai Oil Public Co. Ltd.

Nevertheless, the expected transfer of ownership in CFP's energy recovery unit to Thai Oil's sister company, Global Power Synergy Public Co. Ltd. (GPSC) in 2024 will lower Thai Oil's debt-to-EBITDA ratio to about 3.0x. This assumes a gradual recovery in refining product spreads and no other sizable investments. Given our view of Thai Oil as a highly strategic subsidiary to PTT, our issuer credit rating on Thai Oil is one notch below the group credit profile. This reflects our view of: (1) the parent company's creditworthiness; (2) the parent's relationship with the government; and (3) the subsidiary's relationship with the parent. The stable outlook on Thai Oil mirrors that on PTT. It also reflects our view that Thai Oil will

...Thai Oil Public Co. Ltd.'s earnings will remain under pressure in 2021 and is unlikely to recover to pre-COVID levels until 2022, at the earliest. Weak macroeconomic conditions and unprecedented low air traffic volume will continue to keep demand for petroleum products and their spreads low over the next one to two years. Despite a global rollout of vaccination, we expect mass international travel will take some time to resume, consequently limiting the recovery of jet fuel spreads. In addition, the third wave of COVID-19 in Thailand in early April 2021 will keep domestic demand muted at least through the first half of the year, in our view. We expect Thai Oil's reported EBITDA to be Thai baht (THB) 10 billion-THB12 billion in 2021 and THB17 billion-THB19 billion in 2022 (excluding impact from inventory gain and loss). Still, we forecast Thai Oil's reported EBITDA to remain well below its THB33 billion-THB37 billion EBITDA achieved during the peak of the cycle in 2016-2017. Unfavorable...

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