Hospitality/Minor International

Editorial staff

SET-listed Minor International Plc (MINT) reported a net profit of 1.14 billion in the first quarter of this year.

This profit represented a significant improvement from a 976 million baht loss in the first quarter of last year and was attributable to stronger performance across all business units as well as favorable foreign exchange movements.  

Anantara Grand Hotel Convento di Amalfi - Exterior

At the core level, MINT recorded a core net loss of 352 million baht in Q1/2024 (due to aforementioned seasonality of the European hotel business), representing a 46% improvement (less loss) from a core net loss of 647 million baht in Q1/2023.

MINT’s hotel and restaurant businesses both reported robust financial performance in Q1/2024 from continued rising demand, which enabled the company to implement strategic dynamic pricing, drive increased dine-in traffic and lock in further cost optimization.  

Minor hotels Thailand, Minor hotels Australia and Minor Food all saw double-digit year-on-year growth.  Meanwhile, Minor hotels Europe and the Americas outperformed expectations by narrowing their year-on-year quarterly losses.

Following the interim cash dividend payment of 0.25 baht per share announced in Q3/2023 with respect to its operating performance during the first half of 2023, MINT declared a further cash dividend payment to shareholders in Q1/2024 of 0.32 baht per share reflecting its strong 2H/2023 operating performance.

Together, the total cash dividend payment for 2023 amounted to 0.57 baht per share, representing a dividend payout ratio of 45.1%-well in excess of its dividend policy to pay a dividend of more than 30% of net earnings. This cash dividend payment was made possible by higher-than-expected financial results, an improved balance sheet position, strong cash flow generation from operations and promising outlook for continued business recovery momentum throughout 2024.

For Minor Hotels, the sustained increase in travel activity across geographies and MINT’s ability to increase average room rates drove 21% and 35% surges in Q1/2024 RevPar compared to prior year and pre-pandemic (2019) levels, respectively. Continuous improvements in both leisure and corporate segments in Europe led average occupancy and room rates to rise as well, with Spain seeing the strongest year-on-year RevPar outperformance, followed by Benelux, Latin America, Central Europe, and Italy. Thailand also benefited from the increasing international tourism, resulting in a 25% year-on-year RevPar surge. The figure exceeded pre-pandemic levels by 22% with an occupancy rate reaching 81%, on par with 2019, while room rates exceeded 2019 levels by 23%.

Notwithstanding macroeconomic headwinds including higher interest rates and continued inflationary pressure, Minor Hotels continued to capture higher profit margins compared to 2023.

Minor Food recorded 3% year-on-year total system sales growth in Q1/2024, due to the addition of new outlets in Thailand, Singapore, and the acquisition of the Sizzler brand trademark, which enabled us to consolidate existing franchised stores in Japan. Minor Food’s key brands, particularly in Thailand, saw improved sales figures due to increased customer frequency and docket growth, driven mainly by product innovations. Meanwhile, Minor Food’s bottom line grew at a much stronger rate, increasing 29% year-on-year. This was mostly due to favorable flow-through for most Thailand brands, robust performance of its manufacturing business, as well as improved performance of key joint ventures. Effective cost management and higher productivity also helped drive these impressive achievements.

MINT’s balance sheet continues to strengthen as well as its net interest-bearing debt to equity ratio reduced from 1.01x at the end of 2023 to 0.98x at the end of Q1/2024, mainly driven by improved financial performance combined with MINT’s active capital structure management. This will provide further opportunity for expansion, optimize cost of funds, enhance earnings growth power, and help ensure long-term financial stability going forward.

The recent Minor Hotels Europe & Americas’ credit rating upgrade from Fitch Ratings further underlines MINT’s improving financial outlook.

Anantara Palazzo Naiadi Rome Hotel 

The second and third quarters are the high season for MINT’s most significant earnings contributor, its European hotel business. On top of healthy leisure demand and series of conventions and trade fairs, Minor Hotels Europe & Americas will be a key beneficiary of sporting and entertainment events including the Summer Olympics, UEFA Euro 2024 and music concerts, given its portfolio’s strong footprint in prime urban locations.

In tandem with rising demand and hotel brand upgrade initiatives, average room rates are expected to see further increases. Total revenue in April continued to increase with double-digit growth, while forward bookings in May also posted 12% growth above last year. Increasing flight capacity in Asia, together with hotel renovations and optimization of distribution channels have led Thailand room revenues in April and on-the-book values in May to surpass 2023 levels by 15% and 26%, respectively.

Meanwhile, Minor Food is looking to grow repeat sales from loyal customers and drive new customer acquisitions. Strategies include introducing exciting new products, rolling out special limited time events and driving membership programs, underpinned as always by a focus on operational excellence.

Minor Food will also continue to expand its presence in Asia with the debut of Sizzler in Vietnam, The Pizza Company in Singapore and further growth of its recently-acquired Dairy Queen business in Indonesia.

“We are pleased to deliver such an impressive performance in 1Q24. Hotel forward-bookings are robust, as is the strength of our restaurant platforms, pointing to another good year ahead. Even so, we continue to drive our strategic objectives of achieving asset-right, organic growth, while simultaneously deleveraging our balance sheet to work towards driving even better returns and stronger results for all stakeholders going forward,” Dillip Rajakarier, Group CEO of MINT, said.

MINT is a global company focused on two core businesses: hospitality and restaurants. MINT is a hotel owner, operator and investor with a portfolio of over 550 hotels under different brands such as the Anantara, Avani and Oaks

MINT is also one of Asia’s largest restaurant companies with over 2,600 outlets system-wide in 24 countries under different brands such as The Pizza Company and The Coffee Club.