Minor International (“MINT”) announced a 10 per cent increase in 3Q18 net profit from existing operations (excluding revenues and expenses related to NH Hotel Group) to Bt1.26 billion from Bt1.14 billion net profit in 3Q17, which was attributable to the exceptional performance of Minor Hotels.
Including NH Hotel Group-related items, MINT reported 3Q18 net profit of Bt1.02 billion compared to net profit of Bt1.14 billion in 3Q17. The negative contribution from the investment in NH Hotel Group reflects a short-term timing mismatch, as MINT recorded acquisition-related interest expenses in 3Q18 but did not include any of NH Hotel Group’s performance earnings contribution during the quarter due to the investment being classified as an available-for- sale investment. From 4Q18 onward NH Hotel Group will be fully consolidated with MINT and its results will be reflected in MINT’s earnings.
Minor Hotels’ business includes ownership and management of hotels and serviced apartments, real estate development and other complementary businesses. In 3Q18, Minor Hotels reported net profit from existing operations (excluding NH Hotel Group-related revenues and expenses) of Bt891 million, a record 32-per-cent increase from Bt673 million net profit in 3Q17. This increase was driven primarily by hotel operations, Oaks and residential sales. With strong performance in all key overseas markets, revenue per available room (RevPar) of Minor Hotels’ owned hotels increased by 13 per cent in local currencies. Going into the high season, Minor Hotels’ Portugal hotels reported a RevPar increase of 15 per cent in Euro terms, due to both increased room rates and higher occupancies. In the Maldives, RevPar increased for the fourth consecutive quarter, at a rate of 11 per cent. Hotels in Brazil and Africa saw solid improvement in 3Q18, with RevPar growth of 37 per cent and 29 per cent, respectively, in local currencies. Oaks grew its RevPar at a steady 3 per cent pace in A$ terms, while its efficient cost control resulted in profitability improvement. Minor Hotels also realised residential sales during the quarter, contributing to overall net profit growth in 3Q18.
Minor Food operates a portfolio of casual dining restaurants in Thailand, China, Australia and Singapore. Minor Food reported net profit of Bt350 million in 3Q18, a decline from 3Q17 net profit. The soft performance was primarily attributable to the prolonged slowdown in the consumption environment across most of Minor Food’s key markets, resulting in negative sales growth across the business.
Nevertheless, Minor Food continued to expand its outlet network, particularly in Thailand and China. Store growth, together with menu refreshes and new product launches, should translate into increasing sales when the consumption and retail patterns strengthen again.
Minor Lifestyle is the exclusive Thailand distributor of fashion apparel and household products under various international brands and a contract manufacturer of household goods for FMCG companies. Minor Lifestyle reported net profit of Bt19 million in 3Q18, a decline compared to net profit in 3Q17. Similar to Minor Food, Minor Lifestyle experienced a subdued consumer spending environment, which prompted higher mark-down on end of season sales. Trends are expected to improve going forward.