Moody's "COVID-19 Causes Traffic Decline, Negative Credit Impact on Korean Transport Companies"

[Asia Economy Reporter Minji Lee] The international credit rating agency Moody's forecasted on the 11th that the decrease in traffic volume due to the spread of the novel coronavirus infection (COVID-19) could have a negative impact on the credit ratings of Korean transportation companies.

Moody's explained, "As the spread of COVID-19 reduces commuting, social activities, and business trips, traffic volume decreases and the profits of transportation companies will decline."

Moody's estimated that from mid-February this year to the present, the average traffic volume of Korea Railroad Corporation's high-speed trains and Korea Expressway Corporation's highways decreased by 20-30% and 20%, respectively, compared to the same period last year.

Additionally, it forecasted that on an annual basis this year, the high-speed train traffic volume of Korea Railroad Corporation and Suseo High-Speed Railway (SRT) operator SR, as well as the highway traffic volume of Korea Expressway Corporation, will decrease by 10-12% and 6-7%, respectively, compared to last year.

Furthermore, assuming a negative scenario where the possibility of a global economic recession increases, it also projected that this year the traffic volume of Korean high-speed trains and highways could decrease by 35% and 26%, respectively.

Finally, Moody's anticipated that "Korea Railroad Corporation, which already had weak credit indicators before the spread of COVID-19, will be relatively more affected by the impact of the COVID-19 outbreak."

This content was produced with the assistance of AI translation services.