Minor International to operate Anantara resort business in Malaysia under joint venture with DRH

A securities analyst believes this overseas revenue source should contribute to Minor’s projected 30-per-cent net-profit growth this year.

MINT’s corporate chief financial officer, Traithip Siwakritkul, said Minor and DRH, a subsidiary of Khazanah Nasional, would jointly develop the new business under the Anantara brand. Minor hopes to apply its extensive hotel-management experience to business in Malaysia, a country with a diverse cultural and architectural environment.

Since DRH has no equity stake or company director role in MINT, it is not a related entity as defined by the Stock Exchange of Thailand and thus does not need to comply with the SET’s 2003 full-information-disclosure rule. However, Minor says it will keep the SET and investors informed of future developments on this project.

According to an analyst at KGI Securities (Thailand), Minor’s recent business acquisitions should contribute 7-8 per cent of the company’s net profit this year, which is in line with the company’s long-term strategy to expand revenue sources overseas. This should also help Minor to maintain a 15-per-cent annual growth rate for the next five years.

Based on the net-profit projection of up to 30 per cent this year and 17 per cent in 2016, coupled with Minor’s business growth and full-year recognition of acquired overseas hotel operations, which should add 8 per cent to net profit, the analyst projects Minor’s net profit for the fourth quarter of 2014 to rise by 9 per cent to Bt1.7 billion over the same period of 2013, thanks to strong performance of its overseas hotel business.

The occupancy rate of hotels under Minor’s management last quarter was 66 per cent, down from 70 per cent in the same period of 2013 because of lower occupancy of its domestic hotels. The revenue and EBITDA (earnings before interest, tax, depreciation and amortisation) of domestic hotels accounted for 40 per cent, while hotels in Bangkok accounted for one-third of the revenue from hotels operations, or about 5-6 per cent of total revenue.

The securities analyst has positive views of Minor’s Bt8.6-billion hotel acquisitions in Africa and Portugal. Overseas hotels should contribute slightly over 20 per cent of EBITDA margin compared with more than 30 per cent by Minor.

For the long term, Minor will rely on hotels under its management to expand in Africa and neighbouring areas. This is the same business model as that of its Oaks Hotels interest in Australia, whose acquisition paved the way for Minor to expand not only in Australia but also in New Zealand and China later.