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MINOR INTERNATIOANL Public
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1.)
In the year 2005, despite lingering consequence caused by the Tidal Wave, Minor International Public Company Limited (“MINT”) operations and financials showed the solid performance – thanks to the geographical diversification of the Company’s hotel properties. That said, the spill-over tourists from the Southern provinces caused a significant growth to MINT’s hotels & resorts occupancy rate of its Bangkok On MINT ’s food business, the operation was marginally hit by the government’s alleviation oil price subsidy and the bird flu epidemic during the mid 2005. However, the Company’s continued expansion through both owned equity and franchising strengthened overall operation and financials compared to the previous year. In 2005, the expansion of MINT ’s food business remained its dominant share of pizza and ice cream markets in Thailand China and the continued expansion on food franchising outlets in Middle East proved the Company’s capacity to expand globally. Growth of the spa business was also significant after its 100% investment of Mandara Spa in 2004. The Company successfully opened 3 new spas and managed 2 spas in Thailand and Maldives and South Africa On its 12-month operations, the Company’s 2005 financial results showed a net profit of Baht 1,061 million increased from Baht 712 million in year or increased 49%. Net profit of Baht 322 million contributed from food group (MFG) (after adjusting good will, dividend from parent company, and interest expenses for investment in MFG) and from hotel and other service groups in the amount of Baht 513 million. The property, entertainment, and spa businesses all combined for a net profit contribution of Baht 226 million.
2) The
major changes that affected to the Company’s operating results in the future
are as follows:
2.1.
2.2.
Internationally,
the Company expanded its franchised The Pizza and Swensen’s outlets in the
2.3.
Domestically,
the Company added 14 outlets of The Pizza (include 7 franchises), 22 Swensen’s
outlets (include 17 franchises), 3 Sizzler outlets, and 7 Dairy Queen outlets
in the year.
2.4.
In
January 2005, the Company increased its interest in Rajdamri Hotel PCL (“RHC”)
to 90.8% from 57.7% through the tender offer at Baht 47 per share.
2.5.
In
February 2005, the Company started its second phase of the timeshare project or
Marriott Vacation Villas Time Share with total 84 units. The investment is a 50% joint venture
between
2.6.
In March
2005, the Company has changed its corporate name from Royal Garden Resorts
Public Company Limited to Minor International Public Company Limited and
publicly campaigned the re-branding strategy to be a leading internationally
hospitality and leisure operator by delivering branded products and services.
After the full consolidation of The Minor Food Group to be one of the largest
hospitality of leisure companies in Asia Pacific regions.
2.7.
In December
2005, The Company completed the construction of its 50% joint venture in 3 hotels
in the
2.8.
The
Company completed construction of its 15 rooms the Four Seasons Golden Triangle
(Tented Camp) in Chaing Rai. The
official opening set out in January 2006.
2.9.
In 2005, the Company opened five spas in
2.10. The Company announced the Board of
Directors’ resolution in raising 187 million shares through a 1 for 15 rights
offering. Purpose of the proceeds
will be used to invest in
2.11. The Stock Exchange of
Thailand has included
2.12. New
shares issuance in 2005 are
- The new shares of 14.39 million
with total value of Baht 23 million from 1.16 million warrants exercise.
- The new shares of 242.5 million from
stock dividends paying for its 2004 performance.
2.13. In September 2005, JW
Marriott Phuket received total claims of Baht 60 million on business
interruption insurance caused by the Tsunami. Anantara Coco Palm also received the
insurance coverage of Baht 260 million on the entirely damage properties.
2.14. The Company accomplished in having six
hotel management contracts (under its owned brand – Anantara) in
2.15.
3.) Company’s
A. The
Company’s operating results and those of its subsidiaries in the year 2005 showed
a total profit of Baht 1,061 million, up Baht 349 million or 49% over the
previous year, explanation are as follows:
3.1) Revenues
3.1.1)
Revenue from Food & Beverage Services up 10%
The Company’s revenue from food & beverage in
the year 2005 increased to Baht 4,793 million, increasing Baht 438 million or
up 10% from the previous year. The growth was driven by strong same-store-sales
growth of 6% in 2005. Note that the
growth in 2005 is relatively lower compared to the growth in the year 2004 when
the full-year consolidation of Minor Food Group initiated.
1.
Total
sales of The Pizza in 2005 were increased by 11% compared to 2004. The strong
surge in sales during the period was driven partly from the same-store-sales
growth of 6% and the new shop expansion of another 12 and 15 shop under owned
equity and franchises, respectively.
2.
Swensen’s
(Thai) Limited, which sells premium ice cream under the “Swensen’s” brand, saw
its sales jumped by 27% over the same period last year. This outstanding
performance in Swensen’s sales was due to 26 new outlets being opened. The new outlets include five owed equity
and 21 franchised shops in
3.
SLRT
Company Limited, the exclusive operator of the Sizzler western seafood and
salad franchise in
4.
Minor
DQ Company Limited, the exclusive operator of Dairy Queen soft serve ice cream
outlets in
5.
Burger
Thailand Limited, the operator of Burger King hamburger restaurants in
6.
Revenue
from the Company’s franchise operations in 2005 was Baht 156 million or 26%
increase compared to the same period last year due when the international operations
received additional income from
3.1.2) Revenue
from Hotel
Revenue from Hotel operations in year 2005 was Baht 4,298
million compared to Baht 2,784 million in 2004. The dramatically increase of Baht 1,515 million
or 54% year-on-year was mainly from the solid performance and the first full
year consolidation of JW Mariott Phuket and Four Seasons Bangkok hotels.. Details of the increase are described as
follows:
The excellent performance of
hotels in Marriott group
1.
The Bangkok Marriott Resort and Spa’s revenue in the year
2005 increased to Baht 950 million from Baht 801 million in the previous year
or up 19%. This is due to the occupancy rate increased to 86% from 82% and the
average room rate increased 17% from Baht 2,951 to Baht 3,444 per night.
2.
The Pattaya Marriott Resort and Spa’s revenue increased to
Baht 438 million in the year 2005 from Baht 391 million in the previous year or
up 12%. This is due to the increased average room rate to Baht 3,101 from Baht
2,799 per night.
3.
The Hua Hin Marriott Resort and Spa’s revenue increased to
Baht 325 million in the year 2005 from Baht 278 million in the previous year or
up 17%. This is due to the increased occupancy rate to 81% from 72% and the
average room rate increased from Baht 3,065 to Baht 3,194 per night.
4.
The JW Marriot Resorts & Spa, despite a marginal increase
in revenues of 1% year-on-year to Baht 720 million in 2005, the company has
proved its resilience after the Tsunami event by maintaining occupancy rate of
near 70% with average room rate increased by 18% from Baht 4,726 to Baht 5,561
per night. Note that the
full year consolidation of the JW Marriott Phuket was started in the year 2004.
Hotels in Anantara group also have
outstanding performance as follows:
5.
The Anantara Resort and Spa Hua Hin’s revenue increased to
Baht 311 million in the year 2005 from Baht 244 million in the previous year or
up 27%. This is due to the increased occupancy rate to 76% from 61% and the
increased average room rate to Baht 3,814 from Baht 3,669 per night.
6.
The Anantara Golden Triangle’s revenue increased to Baht 119 million
in the year 2005 from Baht 105 million in the previous year or up 14% due to
its average room rate increased 14% to Baht 4,756 from Baht 4,173 per night. The increase was resulted from the hotel
renovation in 2004.
Hotels in Four Seasons group have an
in-line result as follows:
7.
The Four Seasons Resort Chiangmai’s revenue in the year 2005
increased to Baht 386 million from Baht 355 million in the previous year or up 9%.
This is due to the increased the average room rate from Baht 11,009 to Baht 12,115
per night.
8.
For the Four Seasons Bangkok, 2005 is the first full year
consolidation of its revenue of Baht 919 million to the Company’s financial
statement. The hotel reported
revenues increased by 1% year-on-year.
The hotel’s occupancy rate in year 2005 was 63% reducing from 68% in the
previous year whereas the average room rate increased to Baht 4,380 from Baht 3,984
per night in the previous year. The reduced occupancy rate was mainly from the
renovation of 160 rooms (40% of total rooms) during April – September 2005. The
room renovation target to complete in 2006 and the Company expects to raise the
hotel average room rate significantly.
3.1.3)
Revenue from Spa Business also reported a year-on-year growth of 7%
The revenue from the spa business in the year 2005 was Baht 316
million increasing Baht 20 million or 7% from last year due to the opening of 5
new spas and extension of treatment
rooms from the previous year.
3.1.4) Revenue from Shopping Center up
18%
Net revenue from shopping centers in the year 2005 increased to Baht 375
million, or up 18 % from the previous year giving the expansion of the rental
space of 3,218 square meters which was closed for renovation last year.
3.1.5) Revenue from Entertainment made a
turnaround in this year with 67% year-on-year growth
Revenue
from the Company’s entertainment operations in the year 2005 was Baht 88
million or a strong increase of 67%.
The strengthened operations of entertainment revenues were mainly from
the completed renovation with new plays and attractions adding such as “Haunted
Adventure” and Infinity Maze which was launched in
3.1.6)
The company recorded Baht 572 million for other income, an increase of Baht 141
million or 32% from year 2004, primarily resulting from franchise fee in the
amount of Baht 33 million, Baht 28 million from sales of raw material to MFG’s
international franchisees.,and Baht 30 million contributions from Four Seasons after
entering into the hotel advisory agreement.
3.2) Cost
of Sales and Expenses
3.2.1) Total Cost of Sales increased 23%
The total
cost of sales in the year 2005 was Baht 3,342 million compared to Baht 2,725
million in 2004, an increase of Baht 617 million or 23% from the previous year. The increase of MINT’s cost of sales
were generally in-line and lower than the increase of revenues. Key highlights are as follows:
·
Cost
of hotel sales increased Baht 466 million or 50% increased from last year
mainly from fully consolidated of RHC and JWMP, however it was in-line with
increasing revenues.
·
Cost
of food and beverage increased Baht 109 million or 7% increase
year-on-year. The percentage of
cost of sales to revenue of this period decreased 1.2% from the same period
last year resulted from the efficiency in its cost controlling amidst the oil
price hike during the year.
·
On
entertainment business, the cost of sales to revenues decreased by 5% comparing with the same
period last year due to the significant expansion of revenues from
entertainment business while cost of sales increased only Baht 2 million.
·
Cost
of sales in the retail properties also increased Baht 17 million or 21%
year-on-year due to the opening of the renovated areas that can enhance rental
additional space in 2006.
·
Cost
of sales in the spa operations substantially increased by Baht 22 million or 19%
year-on-year. The increase was mainly from pre-operating cost of 5new spas
opened in 2005.
3.2.2) Selling and Administrative Expenses
increased 24%
MINT and its subsidiaries had total selling and administrative expenses in the
year 2005 of Baht 4,165 million, an increase of Baht 809 million compared to
the year 2004. The main highlights are as follows:
1) The S&A expenses of MFG in 2005 increased Baht
287 million mainly from
i.
increase
of staff expense, expenses related to branch expansion;
ii.
Marketing
expenses
2) The S&A expenses of hotel and other business
group in 2005 increased Baht 522 million from year 2004 with key highlights as
follows:
i.
The
consolidation of S&A of Four Seasons Bangkok and 50% of S&A expenses of
JW Marriott Phuket with the total amount of Baht 302 million
ii.
Management
fee and marketing expense increased
Baht 157 million which relate to the increasing of revenue including S&A of
Samui Anantara Resort and Spa, opened in 4th quarter 2004
iii.
Selling
and administration expense including opening new spas increased Baht 25 million.
The increased expense was important for the aggressive expansion in the future.
iv.
Land
rental increased Baht 22 million which relate to the increasing of revenue
v.
Pre-opening
expenses of Four Seasons Tented Camp of Baht 17 million
3.2.3) Depreciation and
Amortization increased 25%
The consolidated depreciation charge for the company in the year 2005 was Baht 1,153
million, increased Baht 234 million from last year. The increase was due to the following:
·
The
depreciation of the Minor Food Group PCL. increased in the amount of Baht 9
million.
·
The
depreciation of various hotels and shopping center renovation projects
increased in the amount of Baht 33 million.
·
The
depreciation of Anantara Samui which opened in 4th quarter year 2004
in the amount of Baht 21 million.
·
Consolidation
of depreciation of Four Seasons Hotel Bangkok in the amount of Baht 128 million.
·
The
depreciation of JW Marriott Phuket increased Baht 54 million due to full
consolidation compared to 50% in the previous year.
3.2.4) Interest
Expenses increased 28%
In year 2005, interest expenses of
In summary,
4.) Analysis
of Financial Status
4.1 Assets
MINT had total consolidated assets of Baht 15,445 million, increased Baht 1,365
million or 10% from
·
The
Company’s cash and short term investment decreased by Baht 285 million from
dividend payment;
·
Increase
in accounts receivable in the amount of Baht 64 million and inventory in the
amount of Baht 83 million due to
the increase in revenue;
· Land, building and equipment increased in the amount of Baht 95 million, resulting from renovation of various hotels and shopping centers in hotel group in the amount of Baht 476 million, from renovation and expan