Investing.com -- S&P Global Ratings has revised its outlook on PTT Global Chemical (PTT GC) to negative from stable, while affirming the company's 'BBB-' credit rating.
The rating agency cited a prolonged petrochemical industry downturn that would delay recovery in the company's credit metrics. S&P does not anticipate a meaningful turnaround in GC's earnings until at least 2027, with leverage likely to remain elevated at 6.5x-7.5x over the same period.
GC's full-year 2025 results fell significantly below S&P's expectations, with an adjusted debt-to-EBITDA ratio of about 9x. The weaker earnings resulted from soft product spreads and lower sales volumes due to planned maintenance at its refinery and aromatics plant. The ongoing restructuring of subsidiary Vencorex also contributed to operating losses of nearly THB2 billion.
S&P lowered its business risk assessment on GC, noting that structural overcapacity will continue to impair profitability over the next two to three years. The commissioning of larger, low-cost petrochemical capacity in China and the Middle East has weakened GC's competitiveness in commodity chemicals.
Over the past four to five years, GC's EBITDA margins have been depressed at about 3%-5%, weaker than global peers with similar business risk assessments.
S&P projects GC's EBITDA to be about THB26 billion in 2026, which is 25% lower than its previous forecast. This incorporates expectations for higher petrochemical and refined fuel sales volume over the next 12 months, supported by cheaper Gulf gas feedstock under Thailand's revised gas prices that began in January 2026.
The company will increasingly depend on its THB30 billion asset monetization plan to reduce debt, as S&P projects limited free operating cash flow under current market conditions. Of this amount, GC expects THB9 billion to be completed in the first quarter of 2026, with the remaining THB20 billion via several transactions.
Continued financial support from parent company PTT will support GC's creditworthiness. S&P estimates GC can draw a further THB20 billion-THB25 billion on its extended trade credit facility with PTT, which will help cover refinancing needs through at least 2027.
The negative outlook reflects S&P's view that persistent industry weakness creates uncertainty around the company's deleveraging trajectory over the next 12-24 months. This increases pressure on GC to remain committed to deleveraging toward 5x and to execute on its asset monetization initiatives.