The Erawan Group (ERW) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 results with strong year-on-year and quarter-on-quarter growth, driven by robust tourism recovery in Thailand, Japan, and the Philippines, and effective rate strategy.

• Normalized revenue rose 12% YoY to THB 1,844 million; normalized EBITDA up 13% YoY to THB 546 million; reported net profit surged 155% YoY to THB 361 million; normalized net profit up 5% YoY to THB 127 million.

• HOP INN brand expansion continues, with 4 new hotels opened in Q2, portfolio now at 86 hotels and 11,194 rooms, and a target of 150 hotels in Asia Pacific by 2030.

• Completed acquisition of two hotels from Erawan Hotel Growth Property Fund for THB 1,590 million.

• Tourism recovery supported by government visa initiatives and strong demand from China and India.

Financial highlights

• Q2 revenue reached THB 1,844 million, up 12% YoY; normalized EBITDA was THB 546 million, up 13% YoY; reported net profit was THB 361 million, up 155% YoY; normalized net profit was THB 127 million, up 5% YoY.

• EBITDA margin was 29.6%; normalized net profit margin was 6.9%; gross profit margin was 55.8% in 2Q24.

• Total income for 2Q24 was THB 2,079 million, up 24% YoY; EBITDA was THB 780 million, up 55% YoY.

• Share of profit from associates (mainly ERWPF) was THB 234 million in 2Q24.

• Cash and cash equivalents at 2Q24 end were THB 1,620 million.

Outlook and guidance

• Full-year 2024 guidance: occupancy expected at 80%, ARR growth 5-7% YoY, RevPAR growth 5%, and total revenue growth of 14-15% YoY.

• Grand Hyatt incident expected to have minimal impact on consolidated results, with recovery anticipated by Q4.

• Focus on yield management, F&B performance, and cost leadership to enhance margins.

• Strong demand expected from China and India, with healthy advance bookings for Q3 and Q4.

• 13 new HOP INN hotels under development (12 in Thailand, 1 in Philippines).