TRIS Rating has assigned a rating of “BBB+” to Charoen Pokphand Foods PLC’s (CPF) proposed issue of up to THB15 billion in subordinated capital debentures (hybrid debentures). At the same time, TRIS Rating affirmed the issuer credit rating on CPF and the ratings on its outstanding senior unsecured debentures at “A”, alongside affirming ratings on its existing hybrid debentures at “BBB+”, with a “Stable” rating outlook.
Debenture Proceeds and Rating Differential
The ratings on CPF’s hybrid debentures are two notches below the issuer credit rating, reflecting their subordinated nature and the option for the issuer to defer coupons on a cumulative basis. Proceeds from the new debenture issuance are intended to repay existing hybrid debentures (CPF22PA). CPF’s liquidity is expected to remain manageable over the next 12 months, largely relying on refinancing. As of March 2026, the company held THB23 billion in cash and is projected to generate funds from operations of approximately THB40 billion over the next 12 months.
Major funding requirements over the next 12 months include debt repayments and capital expenditures, with capital spending projected at around THB29 billion. Debt maturities within the year comprise THB166 billion in short-term loans and bills of exchange, THB6 billion in debentures, and THB27 billion in long-term loans. The company plans to refinance a significant portion of its long-term loans and debentures through new debenture issuances, while short-term borrowings, primarily used for working capital, are expected to be rolled over. Refinancing risk is materially mitigated by CPF’s strong repayment track record and access to capital markets. Additional financial flexibility is provided by its marketable equity investments in CPALL and CPAXT, valued at approximately THB141 billion and THB15 billion, respectively, as of March 2026.
Financial Outlook and Performance Factors
CPF’s operating performance in the first quarter of 2026 aligned with expectations, despite weaker profitability resulting from subdued swine prices early in the year. EBITDA declined by 23% year-on-year to THB16.8 billion, with the EBITDA margin narrowing to 12.2% from 15.0% in the same period of 2025. Profitability is expected to recover gradually in the second half of the year, supported by an easing supply-demand imbalance, improving swine prices, and the ongoing restructuring of the aquaculture business.
The company’s leverage remained elevated, with adjusted debt rising to THB524 billion at the end of March 2026 from THB517 billion in 2025, pushing the debt-to-EBITDA ratio to 6.8 times from 6.3 times. Leverage is likely to remain high over the medium term due to ongoing investment requirements, though a disciplined financial policy is expected to contain debt to EBITDA below 8 times on a sustained basis. The “Stable” outlook reflects expectations that CPF will maintain its leading position in the agribusiness and food industry, with its diverse operations helping mitigate commodity price volatility and disease epidemics.
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