The Erawan Group (ERW) Q1 2025 earnings summary

Executive summary

• Achieved 7% year-on-year revenue growth in Q1 2025, driven by a diversified hotel portfolio, dynamic pricing, and resilience amid external challenges.

• Non-luxury segments contributed 65% of revenue, reflecting a strategic shift toward budget and midscale offerings.

• EBITDA increased 12% year-on-year to THB 785 million, and net profit rose 21% to THB 345 million, demonstrating strong operational execution.

• Maintained a solid financial position, supporting future expansion and resilience against market volatility.

• Agile pricing strategies led to a 2% YoY increase in average room rates despite softer international arrivals.

Financial highlights

• Q1 2025 revenue reached THB 2,136 million, up 7% year-on-year; normalized EBITDA at THB 785 million (+12% YoY); normalized net profit at THB 345 million (+21% YoY).

• EBITDA margin improved to 36.7%, with luxury to economy segment at 35.3% and budget segment at 41.6%.

• Budget segment revenue grew 29% YoY, with EBITDA up 40% YoY and margin at 41.6%.

• Net cash from operating activities was THB 566 million, down 22% YoY due to higher accrued expense payments.

• Leverage ratio/interest-bearing debt to equity improved to 1x, reflecting strong profitability and disciplined financial management.

Outlook and guidance

• Full-year 2025 group revenue growth guidance revised to 6%-8% (from 10%) due to slower Chinese arrivals and earthquake impact.

• Economy to luxury segment expected to grow 3%-5% for the year; budget segment guidance remains at 23% growth.

• Q2 expected to be softer due to short-term earthquake impact and continued weakness in Chinese arrivals; recovery anticipated in Q3.

• Focus remains on portfolio expansion, market diversification, agile pricing, and cost management.

• Ten new HOP INN hotels planned for 2025, with three already opened in Q1, adding 789 rooms.