Asset World Corporation announces Q1/2020 net profit of Bt 108.2 million


Asset World Corporation announces Q1/2020 net profit of Bt 108.2 million boosted by organization-wide cost efficiency initiatives  and diversified portfolio that maintains business balance amidst COVID-19 crisis

Asset World Corp Public Company Limited (AWC), Thailand’s leading integrated lifestyle real-estate group, today announced its operating performance for the first quarter of 2020 with a net profit of 108.2 million baht, a decrease of 55.6% from 243-million-baht net profit over the same period last year. The company also reported the total revenue of 2,512.9 million baht, a decrease of 30.6% from 3,623.0 million baht over the same period last year due to the emergence of the COVID-19 outbreak (If the common control accounting standard is not applied, the total revenue for the first quarter of 2019 would be 3,031.5 million baht which means the total revenue of 1Q/2020 is declined by 17.1% year-on-year). To ensure cost effectiveness that creates business sustainability, AWC has pledged to continue with business by adhering to cost efficiency initiatives. As a result, Q1/2020 corporate expenses and the total operating expenses were reduced by 37.1% and 22.1% over the same period last year respectively.

Wallapa Traisorat, CEO and President of Asset World Corp Public Company Limited (AWC), said, “The first quarter of 2020 was a challenging time for everyone. Affected by the COVID-19 situation, AWC recorded a net profit of 108.2 million baht, which is a decrease of 55.6% over the same period last year, due to a staggering 80% decrease of number of tourists(1) and the government’s lockdown measures leading establishments including shopping malls to shut down to prevent and reduce the risk of virus transmissions. For this reason, AWC has announced a temporary closure of its hotels and retail properties along with a range of relief measures to help our tenants. However, with the company’s balanced and diversified portfolio, we can continue our business operations in the face of disruptive challenges. This is especially evident in the Office Building business as it has not been directly affected by the pandemic and thus caused a change in the net operating profit structure of operating assets(2). In the first quarter of 2020, AWC managed to gain a net operating profit of operating assets(2) of 1,184.9 million baht, divided into 38.8% in Hospitality, 21.8% in Retail and 39.4% in Office Building businesses.”

Wallapa continued, “Furthermore, AWC has implemented cost-efficiency initiatives since January 2020, which led to Q1/2020 corporate expenses of 127.0 million baht or a decrease of 37.1% from 202.0 million baht over the same period last year. Meanwhile, the total operating expenses of Q1/2020 was 1,364.0 million baht, or a drop of 22.1% from 1,572.1 million baht over the same period last year. As a result, AWC had EBITDA margin of 38.8%, or only 0.7% lower than that of the first quarter last year, despite the aforementioned challenges that caused the company’s loss of income. AWC managed to secure a net profit margin of 4.3%, slightly less than the 6.7% net profit margin recorded in the first quarter last year.”

In the first quarter of 2020, the Hospitality business had a revenue of 1,534.6 million baht from operating assets(2), a decrease of 36.2% from 2,404.0 million baht over the same period last year. The fallout was driven by the impact of the novel coronavirus which has caused a drastic decline in the number of tourists since the end of January, while meetings, seminars, and exhibitions have also been suspended for the time being by the government’s policy.

AWC’s Retail & Commercial business saw a revenue of 1,014.3 million baht from operating assets (2), a decrease of 10.9% from 1,138.5 million baht over the same period last year. This is mainly due to the company’s attempts to temporarily reduce and waive rental fees in order to support tenants affected by the government’s lockdown measures to prevent the spread of COVID-19. AWC is committed to encouraging tenants to be able to continue business as usual in this difficult situation and striving to build a continuous, long-term partnership with them. Office Building business managed to generate steady and continuous cash flow that helps maintain the total revenue of the entire Retail & Commercial business, and clearly reflects the competitive edge of AWC’s core strategy that focuses on investing in a balanced and diversified portfolio of assets.

On 1 January 2020, AWC invested over 25,785.6 million baht(3) to acquire businesses that own Group 3 properties consisting of 12 projects under the 2019 Share Purchase Agreement of 2019, which immediately added 989 keys to the portfolio of operating hotels and subsequently more than 2,500 keys from hotels in development pipeline together with enhancing the competency of future retail developments. With the acquisition, the total assets of the company, as at 31 March 2020, were 124,921.4 million baht, representing a 14.4% growth from the total value of 109,158 million baht recorded as at 31 December 2019.

“As the COVID-19 situation persists, AWC will proceed with the cost-efficiency initiatives as well as an organizational restructuring to deliver improved work efficiency and effectiveness in line with our core business strategy and strategic marketing that meets the changing consumer demand to build a better future for the company, employees, investors and stakeholders. Our goals are to become a real estate business that achieves a constant and sustainable growth, and to overcome the COVID-19 crisis together with everyone,” Wallapa concluded.