Minor International Public Company Limited (SET: MINT) beats the market expectations after reporting a THB 4,607 million in the third quarter of 2022 amid recovery in tourism from the border reopening globally.
MINT reported Baht 4,607 million of net profit in 3Q22, turning around from a net loss of THB 435 million in 3Q21 and a profit of Baht 1,561 million in 2Q22.
In 3Q22, MINT reported an impressive growth of performance both y-y and q-q, as well as exceeding 3Q19 pre-pandemic levels in every key metric including revenue, EBITDA and net profit for all three business units. Meanwhile, both EBITDA and net profit margins also outperformed the 2019 horizon. Particularly, hotels in Europe and Latin America marked historically high third-quarter operating results with margins rebounding back to pre- COVID19 level given strong demand and ability to drive room rate further despite cost pressure.
MINT’s owned and leased hotels portfolio (including NH Hotel Group), which accounted for 85% of core hotel & mixed-use revenues in 3Q22, reported a y-y system-wide revenue per available room (RevPar) increase of 95%. This was due to robust recovery of hotel performances in all key geographies with strong demand from leisure and business travels, together with Minor Hotels’ continued strategy on lifting the room rate. Overall RevPar of owned and leased hotels continued to surpass pre-pandemic level by 25% in 3Q22.
Prior to the earnings result, there were speculations that the company could report less profit due to rising electricity bills in Europe, while some still maintain their view on the multinational hotel operator.
Mr. Chaiyapat Paitoon, Chief Financial Officer (CFO) of MINT told “Kaohoon” in September that the company had an efficient cost control on energy bills as the company had negotiated with suppliers to lock in on a long-term purchasing price. Meanwhile, energy costs only account for 3-4% of its total revenue.
According to Refinitiv consensus, the market expected MINT to report Baht 1,787 million of net profit in the third quarter.
DAOL Securities (DAOL) expected MINT to report better-than-expected earnings for its 3Q22 performance due to a recovery in NH Hotel, expecting the parent company to announce a profit of 2-2.5 billion baht, which would be above the market’s expectations of 1.3 billion baht and DAOL’s expectation of 1.6 billion baht. DAOL recommended “BUY” on MINT with a target price at THB34.00 per share.
Meanwhile, Maybank Securities (Thailand) (MST) stated that NH Hotels, a 94.1% subsidiary of MINT, reported stronger- than-expected profit in 3Q22, EUR72 million vs a loss of EUR30 million in 3Q21 and a profit of EUR62m in 2Q22. This should be a positive psychology for MINT’s earnings outlook in 3Q22 that should continue growing as well. MST gave a “BUY” recommendation on MINT with a target price at THB35.00 per share.