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RATCH Group PCL Issuer Flash: Q1 2026 Results

RATCH Group PCL Issuer Flash: Q1 2026 Results

Report date: 2026-05-18 Event date: 2026-05-13 Event title: Q1 2026 Results

Flash Conclusion

RATCH Group Public Company Limited's (RATCH) Q1/2026 results, dated 2026-05-13, do not materially change the credit view set out in the issuer_summary dated 2026-05-13. The conclusion is that the results provide a mildly positive operating and financial confirmation. EBITDA increased 17.5% YoY and total liabilities declined 3.6% from end-2025, supported by HKP's consolidation and high utilisation, Australian power assets, hydropower projects, proceeds from the Paiton stake sale, and repayment of bank borrowings. However, profit attributable to owners rose only 0.7% YoY, and the sharp increases in revenue and expenses largely include the accounting discontinuity from HKP being consolidated as a subsidiary from October 2025. Therefore, the results should be read not as "confirmation of credit improvement", but as "confirmation that the group is managing the restructuring phase".

The credit read-through is an extension of the existing view: RATCH is supported by its strong relationship with EGAT and long-term PPAs, but on a standalone basis leverage, reliance on equity-method dividends, short-term refinancing, and project structures need to be monitored. The positives are that, even after expiry of the former RATCHGEN thermal PPAs, earnings are being supported by HKP, Australia, Paiton, HPC and hydropower projects; RATCH received THB2.648bn of investment recovery from the Paiton stake sale; and it made net repayments of financial-institution borrowings of THB7.435bn. The negative or neutral points are that cash declined from THB14.253bn at end-2025 to THB10.960bn at end-March 2026, profit was broadly flat, and the earnings decline at RG continues to show the replacement challenge after expiry of the old PPAs.

Accordingly, there is no major change to the credit level, direction, or assessment of near-term rating-change likelihood in the latest summary. RATCH remains a strong government-related power credit in Thailand, but its debt is not explicitly guaranteed by EGAT or the Thai government. Q1/2026 reinforces the previous conclusion that RATCH should be viewed not as an EGAT substitute bond, but as a listed power investment company with expected support from EGAT.

What Was Announced

On 2026-05-13, RATCH released its Financial Report and MD&A for the first quarter ended 2026-03-31. KPMG Phoomchai Audit Ltd. issued a review report on the condensed interim financial statements.

The key figures are as follows.

Metric Q1/2026 Q4/2025 Q1/2025 QoQ YoY Initial credit read-through
Total revenue 12,321 11,994 6,987 +2.7% +76.3% YoY comparison is discontinuous due to HKP consolidation
Revenue from sales and rendering of services 9,516 8,989 4,883 +5.9% +94.9% Supported by HKP, Australian SP, and improved wind conditions
Share of profit of associates and JVs 1,284 1,014 1,232 +26.5% +4.2% Equity-method profit remains an important earnings source
EBITDA 3,752 3,555 3,194 +5.5% +17.5% Operations were solid
Finance costs 1,161 1,202 1,017 -3.4% +14.2% Debt burden remains heavy
Profit to owners 1,228 775 1,220 +58.5% +0.7% Net profit was broadly flat YoY
Normal profit 1,421 974 1,341 +45.9% +6.0% Underlying profit excluding FX improved modestly

On the operating side, HKP recorded an availability factor of 99.95% and a dispatch factor of 95.82%. Since becoming a subsidiary on 2025-10-01, it has been included substantially in RATCH's consolidated revenue and expenses. RG's Combined-Cycle availability factor was high at 98.89%, but revenue declined due to lower dispatch instructions from EGAT and the expiry of the Thermal Unit 1/2 PPAs on 2025-10-30. RAC was supported by electricity sales prices and generation volume in South Australia, as well as improved wind conditions at Mt. Emerald, Collector and Starfish Hill.

For equity-method investments, Paiton's earnings were supported by higher dispatch from PLN, but RATCH's stakes in Paiton Energy and Minejesa Capital declined from 36.26% to 31.26% on 2026-02-24. HPC improved QoQ as it recovered after the planned outage in Q4/2025, but recognised earnings were constrained YoY by Thai baht appreciation. PNPC and NN2 benefited from improved water volume and generation.

In terms of financial position, total assets were THB239.183bn, total liabilities were THB125.660bn, and total equity was THB113.523bn at end-March 2026. Total liabilities declined by THB4.697bn from end-2025. The MD&A explains that the main driver was THB7.435bn of net repayments of borrowings from financial institutions, partly offset by an increase in the THB-equivalent value of USD borrowings. Simple D/E, calculated as total liabilities divided by total equity, was approximately 1.11x.

In cash flow, operating cash flow was an inflow of THB2.646bn, investing cash flow was an inflow of THB2.924bn, and financing cash flow was an outflow of THB9.055bn. Investing cash flow included THB2.648bn of proceeds from the reduction of the Paiton Energy stake, THB1.170bn of dividend receipts, and THB168mn of interest receipts. Financing cash outflow was mainly THB7.435bn of net repayments of financial-institution borrowings and THB1.269bn of interest paid. Cash and cash equivalents declined from THB14.253bn at end-2025 to THB10.960bn at end-March 2026.

As post-period events, RATCH issued THB3.500bn of four-year, 1.94% fixed-rate, unsubordinated and unsecured green debentures due 2030 on 2026-04-10. In addition, at the shareholders' meeting on 2026-04-23, shareholders approved a total FY2025 dividend of THB3.480bn, or THB1.60 per share, from FY2025 profit, with THB1.740bn to be paid in May 2026 after deducting the interim dividend already paid. On 2026-04-28, RATCH transferred all businesses of RALC to RATCH itself, changing its ownership of RPCL from indirect to direct. On 2026-05-13, RATCH also made an additional capital payment of USD6mn, equivalent to THB192.66mn, to Xekong 4 Power.

Credit Read-Through

First, Q1/2026 is a set of results that confirms operating stability after HKP consolidation. HKP is a domestic gas-fired power plant with a 25-year PPA with EGAT, and is a core asset for RATCH in supplementing stable domestic earnings after expiry of the former RATCHGEN PPAs. HKP's high availability and dispatch in Q1/2026 are an initially positive answer to the question emphasised in the 2025 summary: whether replacement assets can genuinely support earnings. However, HKP consolidation increases the depth of long-term PPA assets while also bringing in consolidated debt and expenses. The sharp increase in revenue should not be read directly as a sharp improvement in credit quality.

Second, the impact of expiry of the former RATCHGEN PPAs is still visible. RG's revenue declined significantly from THB1.512bn in Q1/2025 to THB553mn in Q1/2026. This reflects expiry of the old Thermal Unit 1/2 PPAs and lower dispatch from EGAT. RATCH's domestic credit base is being supplemented by HKP and RPCL, but the group is in the process of shifting its earnings sources away from mature domestic PPA assets such as the former RATCHGEN assets and towards new consolidated subsidiaries, equity-method assets, and RPCL after restructuring. In credit analysis, the issue is not that stable earnings have disappeared, but that the location of stable earnings and the debt structure have changed.

Third, reliance on equity-method investments and dividends showed both strengths and constraints. Equity-method profit was THB1.284bn in Q1/2026, up 4.2% YoY. Paiton, HPC and hydropower projects continue to support earnings. However, while the THB2.648bn of proceeds from the Paiton stake sale is positive for liquidity, the remaining stake has fallen to 31.26%, which also reduces part of the future earnings and dividend source. Creditors at the RATCH parent level need to look not only at consolidated EBITDA, but also at actual dividends upstreamed from JVs and associates, disposal proceeds, and additional investment obligations.

Fourth, the financial position has improved somewhat, but not enough to eliminate liquidity risk. The reduction in total liabilities and repayment of financial-institution borrowings are positive. The THB3.500bn green debenture issuance in April 2026 is also positive as post-period confirmation of capital-market access. On the other hand, cash declined by THB3.293bn, and payment of the remaining FY2025 dividend of THB1.740bn is scheduled for May 2026. Looking only at the quarter-end balance sheet, short-term borrowings, the current portion of long-term borrowings, and debentures due within one year still exist. RATCH is therefore an issuer that manages liquidity through a combination of cash on hand, operating cash flow, dividend receipts, bank borrowings, and access to the debenture market.

Fifth, the distinction between expected EGAT support and a legal guarantee is unchanged. The Q1/2026 results reconfirm the importance of PPA assets with EGAT and the domestic power portfolio, but they do not indicate that RATCH's debt is directly guaranteed by EGAT or the Thai government. Rating uplift from support, the domestic AA+ rating, and EGAT's 45% ownership are significant credit supports. However, bondholders' claims are against the RATCH group, and project borrowings, collateral, JV dividend restrictions, intra-group guarantees, and covenants still need to be reviewed.

What To Watch Next

The first item to monitor is the extent to which HKP, RPCL, and the remaining Ratchaburi Combined-Cycle can replace stable domestic earnings after expiry of the former RATCHGEN Thermal Unit 1/2 PPAs from H1/2026 onward. Q1/2026 was a good start, but it remains necessary to continue checking HKP's full-year contribution, utilisation, dispatch, fuel prices, availability payments, and RPCL's dividends and equity-method profit.

Second is equity-method profit and dividends after the reduction in the Paiton stake. The sale proceeds in Q1/2026 are a one-off liquidity item, while future earnings and dividends will be based on the remaining 31.26% stake. Paiton and HPC are coal-fired power plants and are short- to medium-term dividend sources, while also carrying transition risk, financing constraints, and regulatory and offtaker risk.

Third is funding from Q2/2026 onward. Given the April 2026 green debenture issuance, the May 2026 dividend payment, the additional capital payment to Xekong 4, and construction and investment projects such as NNEG expansion and Song Giang 1, the trend in cash, short-term borrowings, bond redemptions, bank borrowings, undrawn credit facilities, and interest paid should be monitored. RATCH was able to repay bank borrowings in Q1/2026, but this alone should not be taken to mean that the leverage issue has been resolved.

Fourth is rating-agency updates. It will be necessary to see how the support uplifts in TRIS AA+ / Stable, S&P BBB- / Stable, and Moody's Baa2 / Stable respond to HKP consolidation, the Paiton sale, expiry of the old PPAs, additional investment, and leverage. For the international ratings in particular, the difference between the standalone credit assessment and the rating after EGAT support is large, so any change in wording on RATCH's strategic importance to EGAT would be important.

Fifth is individual bond and financing terms. This Flash prioritises the read-through from the Q1 results and has not checked individual debentures' change of control, cross-default, negative pledge, financial-ratio maintenance covenants, project collateral, RH International debt terms, or current spreads on foreign-currency bonds. Separate detailed review is required before investing in specific bonds.

Sources

Unverified / Pending