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MINT cuts investment budget by 30% to break even faster

CorporateAug 21. 2020

By The Nation

Hospitality giant Minor International (MINT) says it is reducing costs and cutting its investment budget by 30 per cent (around Bt10 billion) to reach break-even point faster.

Chaiyapat Paitoon, MINT chief strategy officer, said the company’s second-half performance is expected to improve after the company’s businesses bottomed out in April and May this year and its hotels and restaurants gradually reopened.

“These positive sentiments will boost the company’s second-half revenue above the first-quarter earnings of Bt30.244 billion and reduce losses,” he said.

For the second half of the year, MINT’s hotel arm will focus on domestic tourists as demand rises after the lockdown, while it expects to see a clearer picture of the travel bubble scheme for foreign tourists.

“For the restaurant business, we expect to see growth in revenue though a decline in delivery services. However, same-store sales growth is expected to recover from the third quarter onwards,” he said.

“[MINT’s] lifestyle business is still performing well, especially online sales”, driven partly by demand for disinfectants, he added.

The company is working on reducing costs by over 20 per cent year on year and has cut the investment budget by 30 per cent or Bt7 billion to Bt10 billion, he said.

This would enable the company to reach the break-even point faster from a hotel occupancy rate of 30-40 per cent instead of the previous of 50-60 per cent.

“Meanwhile the restaurant business is expected to reach break-even point from sales at 69 per cent from the previous of 80 per cent.”

He added that the company’s cash flow was at a level above Bt36 billion, while its credit line was Bt26 billion, resulting in liquidity of up to Bt60 billion – sufficient for operating costs and repayment of debts.

“In the second half, Bt3.5 billion in long-term debts will come due, while Bt4 billion debentures will reach maturity in the first half of 2021,” he added.