Minor International's q1 results top expectations

The company has more than 800 restaurants, including the Pizza Company, Swensen's, Sizzler and Burger King outlets, and 16 premium-quality hotels and resorts in Thailand, Vietnam, Maldives, Indonesia and the Middle East.

Minor International recorded a net profit of Bt750.01 million in the first quarter, up from Bt450.28 million in the corresponding period last year, or a 66-per-cent increase. The company's revenue increased from Bt3.67 billion in last year's first quarter to Bt4.36 billion this year.

CIMB-GK Securities (Thailand) said Minor's performance was 15 per cent above the broker's expectations because of strong food business and good cost control.

Food revenue rose 11 per cent year on year. However, the gross margin in the food business declined from 62.7 per cent in last year's first quarter to 60.3 per cent, due to rising costs.

The broker pointed out that inflation this year would be a key factor to further curb the company's gross margin.

However, Minor will realise revenue from Thai Express in the second half of this year, having recently bought a 70-per-cent stake in the food enterprise. The new business will support Minor's  food revenue this year, helping it to grow by 27 per cent, which may offset the declining gross margin.

CIMB-GK Securities said the gross margin in the company's hotel business improved from 70.4  to 71.3 per cent in the first quarter.

Although the company's operating result in the first quarter accounts for 36 per cent of CIMB-GK's full-year expectation, the broker has maintained its existing forecast for this year because the first and fourth quarters are peak seasons for the food and hotel businesses.

However, because of aggressive business expansion, the broker has predicted that Minor will deliver strong earnings growth over the next three years.

Phillip Securities said it was likely to revise upwards its forecast for Minor's full-year earnings after the company's strong first-quarter figures. The first-quarter net profit accounted for 40.4 per cent of Phillip's full-year estimate. The broker expects Minor's full-year net profit to be Bt1.906 billion, up 18.3 per cent from last year.

Kim Eng Securities said the opening of the new Anantara resort in Phuket, which is wholly owned by Minor International, and revenue from management of Anantara Hotels in Bali and the Middle East, will support revenue growth of 10 per cent to Bt15.493 billion this year.