Thai Minor Intl aims for 15-20% profit growth in 2012

BANGKOK(Reuters): Thailand’s top listed hotel and fast-food restaurant operator, Minor International , is looking for net profit growth of 15-20 percent in 2012 and wants to buy more foreign assets to boost long-term growth, a senior executive said.

Tourism suffered from Thailand’s worst floods in more than half a century last year but is recovering strongly, helped by an influx of Asian and Middle Eastern visitors that offset a slowdown in arrivals from Europe and the United States, Chaiyapat Paitoon, Vice President for Strategic Planning, said.

“All of our businesses have kicked off the year strongly,” he told Reuters in an interview.

The Bangkok-based company owns the Four Seasons, St. Regis, Marriott and Anantara hotel chains in Thailand.

“The recent acquisition in Australia, improving occupancy of hotels after the flooding and the time-share business will be the key drivers for our profit growth this year,” he said, referring to its takeover of Australia’s Oaks Hotels and Resorts Ltd in June 2011.

The company, which competes with local rivals including Central Plaza Hotel Pcl and Erawan Group Pcl, reported a record net profit of 2.88 billion baht ($94.4 million) for 2011, when its restaurant businesses improved despite the floods.

The profit was also helped by a contribution from Oaks plus sales of residences at some of its high-end properties. At the end of 2011, about 50 percent of the total sellable area had been sold at its St. Regis property. “Our goal is to have this same level of (net profit) growth each year for the next five years,” Chaiyapat said. Foreign tourist arrivals increased 8 percent in January to 1.95 million tourists compared with a 2.2 percent contraction in December, central bank data shows.Average occupancy rates at Minor’s hotels is expected to rise to nearly 70 percent this year from 65 percent in 2011, while the average room rate is expected to be a little higher than the 5,400 baht per night seen in 2011, Chaiyapat said.

Minor, founded by U.S.-born entrepreneur William Heinecke, who is on the Forbes list of Thailand’s 40 richest people, wants to acquire one or two overseas assets per year, Chaiyapat said, adding it operated 75 hotels and 1,257 restaurants at the end of 2011.

The company has set aside a 10 billion baht budget for acquisitions over the five years, he said, adding that certain markets where it was already operating such as China, Australia and Singapore looked particularly interesting.“We are seeing high growth potential in the food business in a place like China, where consumption is rising ... Next year, we plan to invest in a five- or six-star hotel in Sri Lanka where the hospitality business is booming,” he said.

Chaiyapat said Minor, which has been expanding all across the region, would benefit from more customer flows once the planned single market for the 10-member Association of South East Asian Nations (ASEAN) was in place in 2015.Excluding acquisitions, it would spend about 4 billion baht on investment this year, mainly for expanding its hotel and food businesses, he said, adding funding would come from internal cash flow and bank loans.