Minor records 66% net profit growth in Q1
Strong hotel business gives needed boost
SET-listed Minor International Plc posted a 66% rise in net profit to 3.57 billion baht in the first quarter of this year on the back of tourism’s recovery and the company’s strong restaurant business growth.
Total revenue rose 30% to 15.84 billion baht in the first three months.
The sharp growth was also attributed to the revaluation contributions from its hospitality business’s merger and acquisition activities as required under Thai Generally Accepted Accounting Principles (Thai GAAP).
Excluding the revaluation contributions, first-quarter net profit grew 9% year-onyear to 1.64 billion baht.
A company statement said its hospitality business posted 85% growth in net profit, primarily due to the improving performance of its hotels, a significant increase in contributions from residential sales and a revaluation surplus of 1.93 billion baht related to the acquisition of Tivoli Hotels & Resorts, which was completed in February.
The revenue per available room (RevPar) of Minor’s hospitality portfolio (excluding new hotels) grew 6% to 4,713 baht in the first quarter of 2016 from 4,431 baht in the same period last year, led by a 10% increase in Thai hotels’ RevPar and a 9% increase in Oaks’ RevPar in Australia.
Minor continues to benefit from the solid growth in tourism, both in Bangkok and major tourist destinations including Phuket, Koh Samui and Chiang Mai.
In addition, The Residences by Anantara, Layan continued to show a strong sales momentum, resulting in a 20% year-onyear rise in real estate sales.
Minor expects the performance of its hospitality business to improve throughout the rest of the year, the statement said.
The Tivoli portfolio in Portugal will start to contribute meaningfully to business results for the first time, with its high season being the second and third quarters of the calendar year.
The company’s recent announcement that it will increase investment in its Sun International portfolio — comprising eight hotels in Zambia, Namibia, Lesotho, Botswana and Swaziland — will further help boost the revenue and earnings of the hospitality business going forward.
Meanwhile, Minor’s restaurant business reported 12% net profit growth in the first quarter, due mainly to the better performance of the Thailand and China hubs, together with a higher net profit contribution from Australia as a result of its increased shareholding in its Australian hub from 50% to 70% since November last year.
Its restaurant business in Thailand reaffirmed its lead position in the industry with solid same-store-sales growth of 3% in the first quarter. The China hub displayed a significant turnaround, with same-store sales growth turning positive for the first time in two years.
Minor expects the rising momentum of same-store-sales growth will continue through the rest of the year, supported by innovative product launches and the anticipated recovery of the domestic economy, together with outlet expansion in China.
The increased shareholding in the Australian hub will allow for profit expansion, as operations there take advantage of Minor’s global operating platform and operational abilities.
Minor’s retail business, however, reported a fall in profits in the first quarter, mainly due to the decline of both its retail trading and contract manufacturing businesses.