Centel financial muscle helps face down virus blues

Central Plaza Hotel Plc (Centel) presented a picture of financial strength despite the Covid-19 crisis, with an increase in land value, low gearing and high liquidity undergirding its strong financial ratios.

According to the company's financial statement as of June 30, submitted to the Stock Exchange of Thailand, the company said it prepared credit lines totalling approximately 8.3 billion baht, sufficient to support its business operations until the fourth quarter next year, to help respond to the uncertainty of the business recovery. The company's current ratio was 0.7 times, better than the end of 2020. The interest-bearing debt to equity fell to 1.2 times, better than the end of last year mainly as a result of an increase in equity due to the revaluation of land.

Meanwhile, the company had interest bearing debt (excluding liabilities relating to leases) to equity of 0.7 times, well below the financial covenant with financial institutions of 2.0 times.

The company has operating costs and expenses, capital expenditure, and interest expenses, excluding interest expenses related to a lease according to Thai Financial Reporting Standards (TFRS) 16, of approximately 370-380 million baht per month on average.

Meanwhile, operating cash flow for food business, together with available cash and cash equivalents on hand is sufficient to support its operation and investment.

In the second quarter of this year, the company achieved total revenues of 2.69 billion baht, an increase of 354 million baht or 15% year on year, with the proportion of total revenues 12% for the hotel business and 88% for the food business.

Gross profit was 1.4 billion baht, an increase of 9% year on year and representing a gross profit margin of 55% of revenues (excluding other income), down from 57% in the same period last year.

Centel reported earnings before interest, tax, depreciation, and amortisation (EBITDA) of 302 million baht, down 137 million baht or a 31% drop year on year. The company had a net loss of 652 million baht, up 186 million baht from the same period last year.

If the reversal of asset impairment worth 45 million baht was included, the company's net loss was 607 million baht, an increased loss of 141 million baht.