AWC announces the pandemic weighing down its Q1 result but poises for post COVID-19 recovery

20 May 2021

Asset World Corp Public Company Limited (AWC), Thailand’s leading integrated lifestyle real estate group, has faced an impact in the first-quarter financial performance because of the spiraling coronavirus outbreak wave 2 and the beginning of wave 3 posted the company’s operating income for the quarter dropped to THB 1,109 million and a net loss of THB 594 million.

It is noteworthy that the overall financial performance of the first quarter of 2021 was not inferior to that of the second quarter of 2020, the period worst affected by the outbreak.

"The COVID-19 impacts felt by AWC were common across most business sectors in Thailand and globally, but we have managed to contain the damage from spiking excessively. But the company was able to generate positive EBITDA in the period to a level sufficient to sustain operations into the future post-COVID-19'' said Mrs. Wallapa Traisorat, CEO and President of AWC.

AWC has preserved resources, reinforcing its foundations, and making recovery plans to put the business back on the growth track once the spread of the coronavirus is tamed as vaccination advanced.

The Revenue Generation Index (RGI), a measurement of hotel's performance and occupancy rate against market competitors, achieved by AWC's hotels is high with an overall figure of 124.4. The company's Phuket Marriott Resort and Spa in Nai Yang Beach and Le Meridien Hotel in Bangkok scored the highest RGI Index of 363.4 and 324.3 respectively. The company has strong confidence in the cooperation with the world’s famous international hotel chains to bring foreign travelers to stay in AWC’s hotels in the aftermath of COVID-19.

For the shopping center business, AWC's properties are in good locations with their occupancy rates are expected to return to normal operating levels soon. AWC's office buildings are classified as 'Grade A' for them being located on the Central Business District (CBD) and are already performing well.

AWC has several projects under development, 4 of them have been successfully launched in comparison to the first quarter of last year. In which these assets have only recently been in operation including Melia Koh Samui, Sirimahannop, Lasalle's Avenue Phase 2 and Banyan Tree Krabi. These 4 projects have generated cash flow for the organization and Banyan Tree Krabi has an RGI Index of 213.5 which is higher results than the market's standards.

The company has adjusted its organizational structure along with imposing strict Cost Control and Efficiency Initiatives to ensure effective and sustainable expenditure discipline in the future. In Q1/2021, the Company managed to decrease operating costs in the Hospitality and Commercial Businesses by 39.5% and 26.5% respectively compared with the same period last year and decreased the overall cost by 30.3%. In overall, this resulted in a more efficient cost structure and an increase in the EBITDA Margin ratio.

AWC has strong confidence in the current operating properties in regard to being 'quality' assets and plans to acquire more assets to generate cash flow while developing several projects to strengthen the sustainable growth of AWC in the future. The company also sees an investment opportunity from the acquisition of assets from TCC Group and third parties which will strengthen the future growth of AWC.

“We believe in the dynamic of tourism industry in the long run. After post COVID-19 recovery when international tourists return en masse to Thailand and shoppers flocking to retail centers where meet their lifestyle, AWC’s quality assets in hospitality and retail real estate groups are ready to bounce back strongly and generate sustainable growth in the future," Mrs. Wallapa concluded.