Fitch issues tough view for corporates

Thai corporates are bracing for a tough earnings outlook this year, particularly in the petrochemical and energy sectors, as weakening global demand and rising capacity weigh on profitability, according to Fitch Ratings.

- BOONSONG LIPIMAS

Obboon Thirachit, senior director for corporate ratings at Fitch Ratings (Thailand), said local companies, particularly in the petrochemical and energy sectors, are likely to encounter heightened pressure to achieve an earnings recovery this year because of weaker demand amid new supply.

“Private firms are at a crossroads this year,” he said. “They face mounting challenges on both domestic and international fronts, including softening household demand due to high debt, fiscal constraints and ongoing global economic volatility.”

External risks such as geopolitical tensions, supply chain disruptions, trade conflicts and the influx of cheap Chinese goods are compounding pressure on export-reliant sectors, said Mr Obboon.

“The tourism rebound has been slower than expected, and Chinese demand continues to lag due to China promoting domestic travel,” he said.

Meanwhile, climate-driven transitions are intensifying.

“Companies are under pressure to pivot towards low-carbon models, which demand large-scale investment to meet carbon neutrality targets,” said Mr Obboon.