Minor International Public Company Limited (SET: MINT) today announced its fourth quarter financial results for the year 2021. MINT’s 4Q21 core net profit was positive for the first time since the emergence of COVID-19 at Baht 1.7 billion, compared to core losses of Baht 4.3 billion in 4Q20 and Baht 2.4 billion in 3Q21. In 4Q21, Minor Food recorded profit for the sixth consecutive financial quarter, while Minor Hotels and Minor Lifestyle both returned to profitability in the quarter. The y-y improvement was driven by all of MINT’s three business units and underpinned by continued strong demand recovery and MINT’s cost rationalization program. At the same time, MINT has continued to reinforce its liquidity position, strengthen its balance sheet position and reduce its debt to equity ratio through balance sheet management initiatives, including asset rotations as well as land revaluations, which have further enhanced its equity base.
For 2021, core loss improved to Baht 9.3 billion compared to a core loss of Baht 19.4 billion in 2020 given higher sales flow-through and continuous cost saving scheme. On a reported basis, including non-recurring items, MINT posted a loss of Baht 1.6 billion for 4Q21, improving significantly from a loss of Baht 5.6 billion for 4Q20. For the full year, 2021 MINT reported a net loss of Baht 13.2 billion, substantially lower than its Baht 21.4 billion net loss in 2020.
Minor Hotels’ financial performance improved significantly in 4Q21, with positive net profit for the first time in seven quarters at Baht 1.2 billion compared to core losses of Baht 4.7 billion in 4Q20 and Baht 2.4 billion in 3Q21. The y-y improvement was attributable to stronger business trends across all geographies together with robust real estate sales. Pent-up demand, coupled with the reopening of hotels that had been temporarily closed last year, drove the performance of the European portfolio. Meanwhile, the Maldives continued to be the standout performer, with 4Q21 RevPar exceeding 4Q19 pre-COVID levels by 38% due to both increased demand and average room rate. Hotels in Thailand also greatly improved both y-y and q-q as the country reopened to international tourists in November under Test-and-Go scheme and domestic tourism resumed in September following the easing of inter-provincial travel restrictions. Despite continued lockdowns and travel restrictions in many states of Australia in the quarter, MINT’s Australian hotel business also recorded an increase in RevPar in 4Q21, supported by a positive movement in average room rate.
Minor Food continued to be profitable in 4Q21, with all three main business hubs generating profit in 4Q21 and for the full year. Core profit of Baht 290 million was reported for 4Q21, a decrease y-y but an increase from the previous quarter. The y-y net profit decline was mainly due to share of loss from joint ventures, particularly BreadTalk and higher fish purchasing prices in China. Group-wide same-store-sales decreased slightly by 1.7% y-y due to challenging operating environments in China and Australia amid new waves of COVID-19. Nevertheless, the decline of overall same-store-sales improved from previous quarter, from a decline of 7.2% y-y in 3Q21, and same-store-sales turned positive in January and February of 2022, mainly driven by the easing of COVID-19 restrictions in Thailand.
MINT maintained its discipline approach to improving liquidity and strengthening its balance sheet. Free cash flow continued to be positive for the third consecutive quarter at Baht 3.7 billion, due to both improving operational results and proceeds from the sale of a minority interest in five Thai hotel assets in Thailand in December. MINT’s liquidity position held strong with cash on hand of Baht 25 billion and total unutilized credit facilities of Baht 33 billion as at 31 December 2021. In terms of balance sheet position, MINT’s interest-bearing debt to equity ratio strengthened, decreasing from 1.79x at the end of 2020 to 1.68x in 2021, attributable to higher equity base from asset revaluation surplus and the proceeds from the exercise of warrants, together with lower borrowings. MINT’s net interest-bearing debt to equity ratio also fell to 1.36x at the end of 2021 from 1.44x at the end of 2020.
Looking toward 2022, the outlook is promising. The worst of the COVID-19 pandemic is over and a quick recovery is expected due to significant pent-up demand. The global hotel industry is forecasted to make a strong comeback in 2022, given vaccination rollouts across the globe and easing international travel restrictions in many countries. In Europe, several European nations began to ease or phase out COVID-19 restrictions altogether, reclassifying Omicron as an endemic disease. The Maldives should continue to benefit from strong travel demand and both Australia, having enforced one of the world’s strictest border closures, and Thailand are now fully reopening to vaccinated travelers. For Minor Food, easing mobility and social restrictions in Thailand are driving traffic back into outlets. In China, the Riverside brand has proven to be very resilient during this volatile time, as shown by sales rebounds almost immediately after lockdowns have ended. In addition, our earlier store rationalization strategy in Australia, coupled with brand and digital transformation are expected to further accelerate its profitability. Finally, cost tightening plan and CAPEX reductions will remain in place where possible in order to lock in the efficiency gains captured during the COVID-19 crisis.
Mr. Dillip Rajakarier, Group CEO of MINT, commented, “With the efforts in driving our business operations through this recovery phase following a long and challenging period, it is very rewarding to see the strong business rebound in all of our business units, being reflected as positive net profit in the quarter. Although challenges remain, we are working toward a profitable 2022 that will capitalize on pent-up demand and improving business conditions globally. Given our endeavors during the past two years to strengthen our operational platform, as well as our balance sheet and liquidity position, we now have the foundation to emerge from the pandemic even more resilient, leaner and stronger.”
