Minor International Public Company Limited (SET: MINT) today (10 November) announced its third quarter 2022 financial results, reporting a profit of Baht 4.6 billion for 3Q22 compared to a loss of Baht 436 million for 3Q21. For 9M22, MINT reported a profit of Baht 2.4 billion, a significant turnaround from a loss of Baht 11.6 billion for 9M21. On a core basis, excluding non-recurring items, MINT posted core profit of Baht 2.0 billion for 3Q22, exceeding 3Q19 pre-pandemic levels for all three business units. This was a significant turnaround y-y from core loss of Baht 2.4 billion in 3Q21 and a sequential improvement q-q from core profit of Baht 1.2 billion in 2Q22. These results reflect continued demand recovery as well as MINT’s sustained efforts to drive both top- and bottom-line results. MINT’s balance sheet position continues to strengthen, due to higher profit generation and active debt management, resulting in further reduction in leverage ratio as at end of 3Q22.
Minor Hotels’ strong financial results continued in 3Q22, with core profit of Baht 1.5 billion reflecting a turnaround from a core loss of Baht 2.4 billion in the same period of prior year and a 32% increase from 2Q22 core profit. Robust demand growth from both leisure and business travel across all key geographies drove this core profit growth. Hotels in Europe and Latin America delivered historically high third-quarter operating results, as a strong rebound in business and corporate segments, as well as leisure demand, drove RevPar to a level 21% higher than in 2019 in EUR term, mainly driven by higher ADR. Similarly, RevPar of Minor Hotels’ Australian and Maldives portfolios also remained well above pre-COVID-19 levels, while increasing international tourist arrivals and room rate strength saw RevPar of its Thai hotels grow to 75% of pre-pandemic levels.
Minor Food’s core profit of Baht 399 million in 3Q22 significantly improved both y-y and q-q, demonstrating an increase in dine-in activities and its ability to operate more efficiently as it drove higher revenues. Minor Food’s China hub returned to profitability in the quarter, as a result of easing of COVID-19 measures in key cities since June 2022 and the hub’s operational adaptability to different cities’ requirements. Despite lingering COVID-19 control measures in certain areas, most stores in China were able to resume dine-in and delivery services during the quarter. Thailand and Australia hubs continued to deliver improved profits in 3Q22, attributable to successful efforts in maximizing in-store traffic through strong core and innovative product categories, e.g. ice-cream in Thailand and coffee in Australia. As a result, group-wide same-store-sales grew by 16.6% y-y. Together with outlet expansion and reopening of temporarily closed stores last year, total system sales surged 41.3% y-y and exceeded 2019 pre-pandemic levels by 2%. Meanwhile, 3Q22 core profit of Minor Lifestyle turned positive to Baht 72 million from core loss of Baht 86 million in the same period last year from higher store traffics and increased operational efficiency.
MINT remains fully focused and committed to strengthening its balance sheet. Net debt repayment, together with higher equity base from profit generation and asset sales, significantly reduced MINT’s net interest-bearing debt to equity ratio to 1.19x at the end of 3Q22 from 1.36x at the end of 2021 and 1.30x at the end of June 2022. At the same time, MINT maintained strong liquidity with Baht 27 billion of cash on hand and Baht 30 billion of total unutilized credit facilities as at end 3Q22. In tandem with stronger operating results, average free cash flow during the quarter was positive at Baht 5.8 billion.
Looking ahead, the strong positive infrastructure in forward hotel bookings and food will set the stage for MINT to achieve record level performance. MINT expects its European hotel hub to continue to see return of international long-haul travel from North American and Asian markets, large-scale business events and trade fairs as well as increasing demand from large corporates.
Airlines are ramping up capacity in key destinations, boosting arrivals for Thailand hotels and elsewhere. The continued resumption of long-haul flights should serve as another strong growth catalyst. Portfolios in the Maldives, Australia and the Middle East should continue to enjoy positive demand, which would allow them to continue to raise room rates further. Minor Food continues to innovate with new store formats, its brand loyalty platform as well as new product development. Recently, Poulet chicken concept was successfully launched in Thailand. At the same time, MINT looks for opportunities to capture even more operational efficiencies to further enhance the sustainable success of the Company. Energy contract pricing, particularly in Europe, is in-majority already locked in for 2022 and 2023, giving the Company’s added confidence in managing inflation concern, while acceleration of debt repayment and interest rate hedging will help to further manage interest rate costs. In addition to the early redemption of EUR 100 million floating-rate ICO loan in August 2022, NH Hotel Group plans to repay another EUR 100 million in December, much ahead of the schedule.
Mr. Dillip Rajakarier, Group CEO of MINT, commented, “Our strong third quarter financial results demonstrate MINT’s strengths and resilience across all business units. I am proud of our people who went above and beyond for our guests and customers during the difficult period that we have now emerged from. I am also thankful that we continue to exceed our guest expectation and their support. With operating performance of all three business units already surpassing pre-COVID-19 levels, we are extremely confident in the success of our responsible growth strategy through a portfolio of leading hospitality and restaurant brands. Such positive momentum should allow us to overcome macroeconomic pressures. Together with prudent resource management, we are optimistic that we will continue to deliver strong results in 2023 with increased margins.”
