Bangkok--21 Feb--Minor Corporation PCL
Minor Corporation’s (Minor) net profit increased by 4% in 2006 to Baht 261 million despite record lows in consumer confidence caused by higher oil prices, inflation, and interest rates during the first half of the year and political uncertainty and a military coup during the second half of the year. Revenues increased by 9% to Baht 3,213 million on strong performances from recently introduced fashion brands and higher contract manufacturing sales. A significant decrease in margins for the lifestyle brands distribution business was off set by higher margins in contract manufacturing and an increase in equity accounted profit from its investment in Minor International (MINT). Having increased its stake in MINT from 4.3% to 19.1% in 3Q05, Minor equity accounted for its investment in MINT throughout 2006.
Minor’s lifestyle brand sales and distribution business, which accounted for 44% of total 2006 sales, was stable despite record lows in consumer confidence and the military coup. Revenues from fashion increased by 9% to Baht 1,080 million but net operating profit decreased by 28% as aggressive pricing and promotional campaigns were required given the difficult retail environment. Established fashion brands such as Esprit and Bossini and recently introduced rands such as Timberland and Charles & Keith combined to help the fashion business achieve a 9% increase in sales. Sales from the cosmetics business, which includes brands such as Red Earth, Bloom, Laneige and Elemis, increased by 5% to Baht 220 million.
Minor’s contract manufacturing business, which accounted for 46% of total 2006 sales, achieved a 12% YoY increase in sales and a 17% YoY increase in net operating profit. Minor’s factory, which began operating in 4Q04 and was built to accommodate new customers and support higher production volumes, secured new customers and operated at higher production capacities throughout 2006.
Throughout 2006, Minor equity accounted its share of profit from MINT which MINT’s 2006 net profit showed a strong increase by 21% YoY to 1,280 million. Having increased its stake in MINT from 4.3% to 19.1% since 3Q05 by acquiring shares at Baht 4.0 per share, Minor’s investment in MINT has performed well with MINT’s share price increasing by 193% since the acquisition to Baht 11.7 per share. The market value of Minor’s stake in MINT is currently Baht 6.6 billion.
Minor Corporation (Minor) is a leading distributor of international lifestyle brands in Thailand focusing primarily on fashion, cosmetics and education. Its brands include Esprit, Red Earth, Bossini, Timberland, Charles & Keith, Bloom, Laneige, Elemis, Tumi, Henckels, Time Life, and World Book. It owns and operates one of Thailand’s leading contract manufacturers and maintains an investment portfolio of listed and private securities including a 19.1% stake in Minor
International. For more information on Minor, please visit www.minornet.com