Fitch Ratings’ recent briefing indicates a positive trend in Thailand’s corporate earnings across various sectors, despite ongoing high leverage due to significant investments. Key sectors such as aviation, hospitality, and building materials are experiencing notable growth, driven by a strong recovery in tourism and increased government spending.
The power and utility sectors are also benefiting from lower fuel costs, although the substantial investment in renewable energy has led to increased leverage. The oil and gas sector, while showing moderated earnings from a previously high base, continues to perform robustly. However, the petrochemical sector faces challenges due to weak global conditions and an influx of new supply.
Fitch Ratings has adjusted the outlook for many industries to reflect these developments. The aviation sector, in particular, is recovering swiftly as international travel resumes, bolstering earnings for airlines and related businesses. The hospitality industry is similarly benefiting from a surge in tourism, with hotel occupancy rates and revenues rising steadily.
Government infrastructure projects are providing a boost to the building materials sector, which is seeing increased demand for construction supplies. This trend is expected to continue as more projects are rolled out to support economic growth.
In the power sector, the transition to renewable energy sources is ongoing, with significant investments in solar, wind, and other renewable projects. While this shift is leading to higher leverage, it is also positioning Thailand as a leader in sustainable energy in the region.
The oil and gas sector, though experiencing a slowdown in earnings growth, remains a critical component of the Thai economy. The sector’s performance is stabilizing after a period of high earnings, influenced by global oil prices and domestic demand.
Conversely, the petrochemical sector is facing headwinds due to global market conditions and an oversupply of products. This sector’s earnings are under pressure, and companies are focusing on strategic adjustments to navigate these challenges.
Overall, Fitch Ratings’ analysis underscores a recovery trajectory for Thai corporates, with improvements seen across several key sectors. The report highlights the importance of continued investment and strategic management to sustain this positive momentum and address the challenges posed by high leverage and global market conditions.
