Minor boss Heinecke upbeat on 2017 performance

Minor boss Heinecke upbeat on 2017 performance

SET-listed Minor International Plc, a leading hospitality and food company, expects strong business this year as the economy rebounds.

"We're confident that 2017 will be a strong year for Minor," said chairman and group chief executive William Heinecke. "Nearly two months into the year, we already see many positive signs, including Thailand's strong economic rebound."

To date, Minor's own hotels have reported growth in revenue per available room (RevPAR). Minor Food saw growth in same-store sales for most brands in January.

The tourism industry is tipped to recover after tourist arrivals in January rose by 6.5% year-on-year.

Minor has observed pent-up demand for hotel operations and for the Residences by Anantara in Phuket, whose completion was delayed from the fourth quarter of 2016 to January this year.

Last year, Minor posted a 19% rise in total revenue to 56.9 billion baht as consolidated net profit shrank 6% to 4.57 billion baht.

Minor Hotels reported a 27% rise in net profit last year, in large part reflecting its strategic acquisition capability. Despite the mourning period and flooding in the South in the fourth quarter, Minor Hotels' owned hotels in Thailand reported 5% RevPAR growth in 2016.

The Tivoli portfolio performed particularly well last year, with overall strong demand driving room rates higher.

"We believe although the Thai tourism market was temporarily affected by the mourning period and flooding in the fourth quarter, the industry fundamentals remain strong and Thailand remains an attractive tourist destination," Mr Heinecke said.

With healthy property markets in Phuket and Chiang Mai and the quality of Minor's residences, Minor Hotels is confident of strong residential sales for the rest of 2017.

Internationally, Minor continues to execute tactical marketing strategies to attract customers to its hotels, including those in the Maldives and Africa.

Mr Heinecke said the 2017 outlook for Tivoli Hotels & Resorts in Portugal is similarly strong, as the market benefits from its perception as a safe destination free of the disruptive events experienced elsewhere.

Tivoli itself is expected to reap benefits from ongoing renovation projects to be completed in the first half of 2017.

Minor Food reported a 7% rise in net profit last year on 1.3% growth in same-store sales and outlet expansion of 8%.

The food division's growth stemmed from a strong performance in Thailand in the first nine months of the year and in China throughout the year, together with higher earnings contributions from Minor DKL in Australia.

Minor Food experienced a temporary slowdown in demand during the mourning period late last year but looks to resume strong growth this year.

The profitability of China operations is seen strengthening as Minor Food expands in scale. The Australian hub is expected to show stable growth with the continued expansion of a strong franchise base.

Although the Singapore hub experienced challenges in the past two years, the appointment of new management in mid-2016, together with persistent efforts to rationalise the portfolio and enhance the customer-segmentation strategy, should pave the way for improved performance.

Minor Food will continue to execute strategic marketing strategies and drive product innovation while adhering to operational excellence across all hubs in order to drive growth in 2017, Mr Heinecke said.

Minor Lifestyle selectively expanded its brand portfolio in 2016 to broaden its fashion offerings. It will continue to add brands to complement the existing portfolio.

MINT shares closed yesterday on the Stock Exchange of Thailand at 33.75 baht, down one baht, in heavy trade worth 1.1 billion baht.

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