APAC Infrastructure Firms' Earnings To Rise To Pre-Pandemic Levels - Moody's

KUALA LUMPUR, May 27 (Bernama) -- Moody's Investors Service believes that earnings for Asia-Pacific (APAC) infrastructure companies will rise to pre-pandemic levels, but noted that the recovery will be uneven. Moody's assistant vice-president and analyst, Qingqing Guo said aggregate revenue in 2021 will grow 4.0 per cent compared with pre-COVID-19 levels in 2019, with the power utilities, gas and toll road sectors leading the recovery. Meanwhile, funds from operations (FFO) will also slightly recover in 2021, reflecting improving revenue and stable margins, Guo said in a statement Thursday. Guo said the power utilities sectors will drive the FFO increase, contributing over 80 per cent of the total FFO generated by APAC projects and infrastructure companies. Revenue and FFO growth will be highest for the toll road, rail and metro sectors, given their low bases in 2020. "Overall FFO will rise although it will remain slightly below 2019 levels, dragged by the airport and rail and metro sectors. "FFO for airports, in particular, will continue to be negative until 2022. Most of the revenue and FFO growth in the APAC infrastructure sector will come from China," Guo noted. Additionally, aggregate debt will rise by a modest 2.0 per cent in 2021, resulting in a lower average leverage ratio of FFO/debt at 12.1 per cent, compared with 13.8 per cent in 2019. Debt growth will be highest for the airport and toll road sectors. In contrast, the thermal power, integrated power, renewable and nuclear and gas sectors are most resilient, with FFO/debt at around 7.9 per cent to 16.5 per cent. -- BERNAMA