Cost-control measures, strategic asset restructuring, and return of hotel business contribute to a 38.4% year-over-year improvement.
Dusit Thailand Public Company Limited (DUSIT), one of Thailand’s leading hotel and property development companies, has reported its 2Q21 results, with total revenue of THB 587 million, a year-over-year (YoY) increase of THB 163 million (or 38.4%), and net loss of THB 376 million, a 17% improvement on the previous year. First-half revenue for 2021 was THB 1,898 million, up 15.3% YoY.
Ms Suphajee Suthumpun, Group CEO, DUSIT, said that the YoY improvements in revenue and loss during the second quarter and first half of 2021 reflect the company’s stringent cost-control measures, strategic asset restructuring, growth of its international school catering business, and revenue generated by hotels.
“In 2Q20, the majority of our properties were temporarily closed in line with international measures to prevent the spread of COVID-19,” said Ms Suthumpun. “While our core business was, and continues to be, heavily impacted by the global pandemic this year, we have still been able to operate our hotels in various domestic markets. As such, we have enhanced our services to drive as much room and non-room revenue as possible in these destinations.
Our bottom line has also benefited from the gain of sales of investment in an associated company, strategic asset restructuring, the expansion of our international school catering business in Vietnam, and disciplined focus on cost containment overall. Our efforts allowed for a 17.9% YoY cost saving in 2Q21, and helped to reduce the loss expected in the turbulent business environment.”
To mitigate the impact of COVID-19 on its core business and enhance the company’s ability to deliver long-term value for all stakeholders, DUSIT also continued its three-pronged strategic journey for balance, expansion, and diversification.
In the first half of 2021, DUSIT expanded its hotel footprint in Guam, USA, by signing to manage a new property under DUSIT’s White Label concept. Dusit now operates three hotels in the renowned island destination.
In July 2021, DUSIT expanded its food business by opening a new KAUAI flagship store at Asoke Towers in the heart of Bangkok. It is the sixth KAUAI branch in Bangkok, and the first in the city to operate outside of a Virgin Active Fitness Centre. All outlets specialise in offering nutritious and healthy meals made using the finest ingredients available.
“We have taken great care to ensure our new openings are positioned to leverage pandemic-accelerated changes in consumer preferences to drive both short- and long-term revenue,” said Ms Suthumpun. “At KAUAI, this has included providing even easier access to healthy food in the heart of the city and widening the reach of KAUAI’s home delivery services.
At our hotels, we have optimised our services around total revenue generation and rolled out new experiences designed to enhance our competitive advantage and bring additional convenience, experience and value to our guests. In the first half of 2021, this has included introducing our new wellness concept, Devarana Wellness, which goes beyond our traditional spa offerings to weave well-being elements throughout the entire stay experience.
This approach, alongside our group-wide push for vaccination of all employees, has been vital to ensuring our properties are positioned to safely host and delight guests in the post-pandemic world – especially in Phuket and Koh Samui, where we are now welcoming international travellers as part of the unique sandbox programmes.”
Ms Suthumpun said that the company’s approach to the ongoing challenges is essential for building future resilience.
“The third wave of COVID-19 in Thailand is likely to continue impacting our business throughout 3Q21 and beyond, so it is vital that we continue planting strategic seeds for short-, mid- and long-term success,” she said. “Alongside continuing to expand and diversify our business to create new revenue streams, and enhancing our products and services in line with the latest global trends, we will also move ahead with our asset restructuring strategy to strengthen our balance sheet and liquidity position.
Most significant will be the sale and manage-back of Dusit Princess Chiang Mai hotel, which will be recognised in the financial statements of the third quarter of this year. Our focus on fixed-cost containment and liquidity preservation can also bee seen in the successful issuance of new senior unsecured debentures worth THB 1,000 million, announced in July 2021. The proceeds from the new debentures will be used to refinance existing debentures due in September 2021.”
With the firm belief that international travel will come back strong after the pandemic,
Ms Suthumpun is confident that DUSIT’s comprehensive approach to dealing with the ongoing challenges will enhance its competitive edge and position its properties for enduring value creation when the world reopens for tourism.
“We also hope to leverage our position to help spur demand for travel to the benefit of our communities and the industry at large,” she said.