Minor International Public Company Limited


Minor International (MINT) reported net profit of Baht 1.6 billion in 1H12, an increase of 49% YoY from Baht 1.1 billion recorded in 1H11, mainly attributable to improved performance of both hospitality and restaurant businesses. Since the quick post-flood rebound in tourist arrivals in 1Q12, the hotel business's low-season 2Q12 continued to see robust growth YoY, with net profit rising 30% YoY to Baht 364 million in the quarter.

In 1H12, EBITDA of MINT's hospitality business increased significantly by 52% YoY, attributable primarily to the solid improvement in hotel operations and consolidation of Oaks Hotels and Resorts in Australia. Revenue per available room (RevPar) of MINT's hotel portfolio increased by 18% in 1H12, on the back of strong occupancy of 69% in 1H12 compared to 58% in 1H11. This was a result of improvement of hotels in Thailand, together with the addition of Oaks rooms, which run at relatively higher occupancy. In addition, MINT recognized the full first half contribution from Oaks in 1H12 as opposed to one-month contribution in 1H11 upon the completion of the acquisition. 1H12 sales progress of Anantara Vacation Club was outstanding, where sales more than tripled that of 1H11, and was above the budgeted 1H12 figures.

The restaurant business continued to report strong growth, with 1H12 EBITDA increase of 19%. MINT's restaurant portfolio's total system sales growth in 1H12 was 14.0%, as 1H12 same store sales increased by 7.1%, coupled with store expansion of 105 stores YoY. The robust performance was attributable to strong domestic consumption, which drove both the number of customers and average revenue per customer, coupled with the Company's on-going pro-active marketing efforts, which resulted in strong same store sales growth, in particular for The Pizza Company, Swensen's and Dairy Queen brands. The opening of new restaurant outlets alongside business expansion of major retail operators, together with continued growth of the Company's franchised business, also contributed to restaurant performance during 1H12.

Retail trading business continued to see gradual recovery from the flood in 4Q11 into the first half of 2012. The contract manufacturing of consumer goods recently resumed full operations in early June. Nevertheless, the unit's increase in 1H12 EBITDA of 16% YoY was primarily because of the insurance claim received in 1Q12. The retail trading business continues to be a profitable operation of MINT's business, although still small compared to MINT's total business, with 1H12 revenue contribution of 10% and net profit contribution of 5%.

MINT also announced its successful investment in one of Phuket's most luxurious hotels, Bundarika Villas & Suites. Located on the secluded Layan Beach with 400 meters of private beach, the hotel will be rebranded to Anantara after total refurbishment to further strengthen MINT's 5-star deluxe brand in one of Asia's most established tourist destinations. The hotel features 77 villas and suites on 23 rai of beachfront land. In addition to the hotel, MINT also acquires 32 rai of adjacent hillside land with panoramic sunset views of the Andaman Sea. The adjoining land will be developed into high-end residential project. Total investment size is estimated at THB 3 billion. MINT holds 95% interest in the hotel in partnership with original founder, who retains a 5% interest and will continue to work closely with MINT to ensure this a successful investment. The hotel will undergo renovation and operational improvement program to enable it to be re-launched as Phuket's second Anantara next year.

MINT has a proven record of accomplishment in Phuket's hospitality sector, as evidenced by the successful development of its two upscale hotels on Mai Khao beach, namely Anantara Phuket Resort & Spa and JW Marriott Phuket, and the Turtle Village Shopping Plaza Phuket located adjacent to the two hotels, as well as the well-received Marriott Vacation Club and Mai Khao Beach Club projects, which recorded strong combined sales of over THB 6 billion previously. The addition of Bundarika Villas & Suites will reinforce MINT's leadership position in the world-famous beach resort of Phuket. Bundarika, which is to be rebranded as Anantara and the new adjacent high-end residential project, together with the planned launch of the new Anantara Vacation Club Phuket will further echo MINT's commitment to the clustering business model whereby synergy is created among multiple properties and projects within the same location, leading to higher profitability. The new Anantara Vacation Club Phuket, which features 100 villas worth total sales amount of approximately THB 4 billion, is expected to be completed by the end of the year.

About Minor International: Minor International (MINT) is a global company focused on three primary businesses including restaurants, hotels and lifestyle brands distribution. MINT is one of Asia's largest restaurant companies with over 1,200 outlets operating system wide in 15 countries under The Pizza Company, Swensen's, Sizzler, Dairy Queen, Burger King, Thai Express, the Coffee Club and Ribs and Rumps brands. MINT is also a hotel owner, operator and investor with a portfolio of 39 hotels and 38 serviced suites under the Anantara, Avani, Oaks, Marriott, Four Seasons, St. Regis, Elewana and Minor International brands in Thailand, Australia, New Zealand, the Maldives, Vietnam, Tanzania, Kenya, the Middle East, Sri Lanka and Indonesia. MINT is one of Thailand's largest distributors of lifestyle brands focusing primarily on fashion, cosmetics and contract manufacturing. Its brands include Gap, Esprit, Bossini, Charles & Keith, Pedro, Red Earth, Bloom, Tumi, Zwilling J.A. Henckels, ETL Learning and Thaisale. For more information, please visit www.minorinternational.com

  2Q12 2Q11 % Change 1H12 1H11
Sales 7,266 5,855 24% 15,619 12,291
Others 258 423 -39% 673 666
Total Revenues 7,524 6,278 20% 16,292 12,957
Cost of Sales 2,931 2,306 27% 6,128 4,798
Selling & Administrative 3,282 2,900 13% 6,607 5,580
EBITDA 1,311 1,072 22% 3,556 2,578
Depreciation & Amort. 543 492 10% 1,076 905
EBIT 769 580 33% 2,481 1,674
Interest Expenses 276 212 30% 547 342
Earnings Before Tax 492 368 34% 1,934 1,332
Corporate Tax 138 75 84% 296 196
Minority Interest (9) 13 -170% (1) 33
Net Profit 364 279 30% 1,639 1,102
Fully Diluted EPS (Bt) 0.0987 0.0772 28% 0.4473 0.3048
Fully Diluted Shares (mn) 3,686 3,619 2% 3,665 3,615

Note: Share of Profit is included in other revenue.