Minor International Public Company Limited (SET: MINT) on Friday announced its financial results for the second quarter of 2023, reporting record core profit of THB 3.0 billion. This represented a 148% y-y increase from 2Q22 and was 52% above pre-COVID 2Q19. The results reflected continued global recovery momentum in both hotel and restaurant sectors post-COVID.
Minor Hotels’ profit more than doubled on the back of demand recovery across all geographies.
Sustained increase in travel activities across the geographies in which MINT operates drove a strong y-y core profit growth of 120% for Minor Hotels, resulting in core profit of THB 2.6 billion for 2Q23. A robust start of high travel season in Europe also contributed to the strong result, as leisure and business travel demand across all key customer segments led to an average occupancy of 72% and a 18% y-y surge in ADR for Minor Hotel’s owned hotels in Europe and Latin America. Other key markets were also buoyed by continued travel demand recovery, led by Thailand with y-y RevPar growth of 62%. The sustained upturn in global travel demand, together with implementation of Minor Hotels’ dynamic sales and marketing strategy, resulted in 2Q23 RevPar growth of 21% y-y.
Minor Food saw profit expansion with double-digit same-store-sales and total sales growth.
MINT’s restaurant business also recorded strong growth in 2Q23, with core profit of THB 427 million in 2Q23 compared with THB 4 million in 2Q22. In Thailand, same-store sales recorded an 12% y-y increase, primarily due to Minor Food’s continued initiatives to capture returning footfall through viral marketing campaigns and new product launches. China, in particular, saw a significant rebound in 2Q23 with the lifting of lockdowns and dine-in restrictions, resulting in a 40% growth in same-store sales compared to 2Q22.
Strong revenue growth and proactive cost management drove profitability.
MINT’s strong profitability in 2Q23 was not only the result of positive top-line growth trends through hotel ADR and restaurant same-store sales but was also enhanced by successful initiatives to increase efficiencies and productivity across hotel and restaurant portfolios as well as at its corporate offices. As a result, MINT’s core net profit margin grew to 7.4% in 2Q23 from 3.7% in 2Q22.
Strong balance sheet fuels future growth and expansion.
The Company’s commitment to active capital structure management has resulted in a strong financial position, with substantial THB 22 billion in cash reserves, THB 31 billion unutilized credit facilities and net interest-bearing ratio of 1.09x, well below MINT’s internal threshold of 1.30x and debt covenant of 1.75x. This strategic move aims to optimize the cost of funds, providing flexibility for expansion and ensuring long-term financial stability.
Mr. Dillip Rajakarier, Group CEO of MINT, commented on 2H23 and 2024 momentum.
“Our 2Q23 financial performance is a testament to the dedication and resilience of our team, seizing market opportunities as strong consumption recovery continues, resulting in record-high profitability. Looking ahead, the Company is poised to continue its strong momentum in 2H23 and throughout 2024. Increased airline capacity has led many European destinations to surpass pre-pandemic levels of foreign arrivals, benefiting Minor Hotels in Europe. Our strategic locations and exclusive benefit programs allow us to accommodate rising business and leisure travel activities in late summer and early autumn. The fourth quarter marks the peak season for Asia with growing demand from regional markets, long-haul US and European travelers, as well as upscale visitors from the Middle East.
Minor Food also foresees continued growth as consumer confidence continues to build. With the right branding strategies driving loyalty, engagement and innovation, we are well-positioned to thrive in all strategic hubs.
As we move forward, our unwavering focus remains on becoming the preferred brand of choice for customers, employees and partners. Being recognized once again as a constituent of the FTSE4Good Index Series further validates our commitment to sustainability and responsible business practices.”