Minor International Public Company Limited (MINT) Earnings Call Transcript & Summary

[Foreign Language] Good morning, and welcome to Minor International's First Quarter 2021 Analyst Meeting. It is our pleasure of introducing the presentation, which you will hear from Mr. Chaiyapat Paitoon, Chief Strategy Officer; and Mrs. Jutatip Adulbhan, Vice President of Group Investor Relations. [Operator Instructions] And now I would like to hand over to Mr. Chaiyapat and Mrs. Jutatip for the presentation.

Good morning, everyone. Welcome to first quarter 2021 analyst meeting. I would like to introduce our agenda today. First agenda, it will be first quarter results in review. I understand that you have received the results and just some of our MD&A and the results, but we would like to explain a little bit more with the highlights that we have during the quarter. Following the first agenda, Jutatip will go into detail of Minor Hotels, Minor Food and Minor Lifestyle as well as corporate information, and I will wrap up with the response to COVID situation that we have strategized today and also our long-term post-COVID trend, what we're going to do to handle the change in consumer behavior after COVID. First, I would like to start by highlighting what happened in the first quarter. As you all know, there's some short-term volatility here and there, but long-term outlook still remain positive with the arrival of vaccines. It depends on the distribution of vaccine. But in the short term to medium term, we have to still deal with the volatility, second wave, third wave here and there. If you look at our results in the first quarter, the results deepened. The loss that we have deepened from the previous year and also from quarter-to-quarter, net core loss was THB 5.2 billion in the first quarter. But good news is some of the sweet spot that we have is Minor Food. Minor Food continued to report profit even at the NPAT level during the quarter. Minor Food has been profitable at NPAT level for 3 consecutive quarters already. As for Minor Hotels, performance still remain soft on the back of the second wave and third wave that we've seen both in Europe and in Thailand. But there are some other sweet spots within Minor Hotels as well. If you look at management letting rights in Australia and New Zealand, it remained profitable at EBITDA level. And if you look at our mixed-use, the residential sales was quite robust during the quarter. That also lead to mixed-use business profits at NPAT level as well. So is AVC. AVC, also profitable at NPAT level for 2 consecutive quarters as well. Like I said, even though short-term outlook or medium-term outlook still remain volatile and fragile, but long term, we have seen vaccination started in several parts of the world. Now vaccination in Europe has picked up pace. The pace in -- especially in second quarter is better and faster than in the first quarter. And then they expect to reach 70% vaccination rate by September 2021. Good news, indeed. We're probably going to see some recovery, steep and fast recovery in Europe, which used to remain a drag last year. But this year, it's supposed to be a good profit lifter or recovery -- or profitability recovery seen faster and better than other parts of the world. And to prepare for the reopening, we have ensured that our staff, the safety and hygiene of our staff. We have tried to help our staff both on the hotel side, on food side or even lifestyle, vaccinated as soon as possible in our geographical footprint that we have. And also, while we're waiting for vaccination distributions, at the moment, we still adhere to our disciplined cost and CapEx reduction plan, still our main priority to preserve our liquidity and minimize cash burn rate that we have in order -- also in order to reduce breakeven point for us to see profit faster. We're going to elaborate in more detail later on. But if you look at our cash burn rate, the cash burn has come down to THB 1.1 billion per month from THB 1.6 billion per month in the previous quarter. And the worst is behind us, which was second quarter of last year in terms of cash burn rate. We also continued to do a very proactive balance sheet management at both MINT level and NH level, including covenant waiver, refinancing, liquidity management. And eventually, TRIS just reaffirmed our rating of A for the issuer rating and also for our senior unsecured debentures. So that's another good news that we had over the past few weeks. Also, asset rotation that we talked about and we shared with investor in the previous quarter are now underway and on schedule, on track to materialize. And we would likely to get some proceeds in the second quarter or third quarter of this year. Beyond COVID, we're still trying to capture demand recovery, and we're trying to predict and analyze customer behavior that's changed after COVID. Minor Hotels will focus on expanding our management contracts, also the turnaround of NH as well as digital transformation to enhance customer experience. Minor Food also uplift our delivery platform, digital transformation and come up with new product innovation as well. Very quickly, performance highlights. If you look at our core revenue in the first quarter, it's declined by 44% in the mid of the second wave and third wave of COVID compared to first quarter of last year, where the first 2 months of the year were not much impacted by COVID yet last year. So that's why we saw a revenue decline in the first quarter of this year. In terms of net loss, core net losses widened to THB 5.2 billion this year, first quarter of this year, particularly dragged by Europe and Minor Lifestyle; while, like I said earlier, Minor Food still report a turnaround to net profit in the first quarter of this year. So only dragged a little bit by hotels. And also, if you look at the reported profit, reported profit widened to about THB 7.3 billion. That's partly come from impairment from COVID of THB 2.3 billion as well. So that's a quick recap of our performance. In terms of graphical and contribution from Thailand and overseas, in the first quarter, 59% is coming from overseas and 41% is coming from Thailand. We still believe our diversification strategy will probably going to help us to recover and weather COVID going forward, especially the fast recovery that we expect out of Europe going into summer or third quarter or fourth quarter of this year. So I would like to have Khun Jutatip help us deep dive into detail of each business units.

Starting off with Minor Hotels. Revenue declined by about 58% compared to last year in the first quarter. If you look at by business, pretty much everything came down, whether it's owned hotels and leased hotels, management letting rights, managed hotels or mixed-use -- the only business that actually saw revenue increase was mixed-use business partly because of the good sales momentum of the residential. And if you look at by geographies, year-on-year, pretty much across the geographies, it's come down primarily because last year, the first 2 months was still at pretty much normalized level. We only saw COVID hitting the business in about March of last year. And if you look at quarter-on-quarter, the only 2 geographies that saw increase was Thailand and the Maldives. Thailand, again, was primarily because of the mixed-use business, and the Maldives actually saw improvements since the reopening. In terms of EBITDA, even though we did have a lot of cost savings, but EBITDA turned negative in the first quarter of this year. And as a result, the net loss also widened from about THB 3 billion in the first quarter of last year to about THB 5.3 billion in the first quarter of this year. Going into each of the business units, starting off with owned and leased hotels. In terms of number of rooms, it's been quite flat over the past 3 years, primarily, as we mentioned earlier, that we are actually withholding most of the CapEx, so we're not expanding in terms of number of rooms. In terms of RevPAR, it's actually down by about 76% compared to last year and, of course, more from occupancy, especially in Europe and Thailand, where we actually started to see new waves of COVID-19 going into the first quarter of this year as well; whereas last year, again, it was more of a normalized base for the 2 months. And if you look at the monthly trend, we're trying to compare to the pre-COVID level. So we're comparing 2021 with 2019 versus -- and it's also 2020 compared to 2019. So for 2020, which is the light gray line, it's actually down in April, whereas in -- for 2021, we're actually seeing an improvement since April onwards. So at least that's a good sign that we're actually seeing stable performance. But because of the negative RevPAR growth, so the revenue owned and leased hotels also declined by about 73% year-on-year. Now if we go into each of the different geographies, starting off with Thailand. In Thailand, of course, we continued to cater to domestic travels, ASQ, the alternative state quarantine, and hospitality as well going into this quarter with more and more cases that we're seeing in Thailand. And so of course, we're seeing RevPAR down by about 80% year-on-year in the first quarter in Thailand, primarily because we started to see the second wave since end of December. And -- but any case, if you look -- in any case, if you look at the month-on-month trend, we're seeing better trend going into April onwards. In the Maldives, we've actually seen improving trends since the reopening, which is about September of last year. And if you look at in terms of RevPAR, it's down by less than 10% in the first quarter of this year compared to the first quarter of last year. And if you look at the rates, we've actually been able to hold up the rates quite well. So it's only the occupancy that we're seeing a little bit of a dip. But out of all the geographies, this continues to be one of the better geographies for us. If you look at the monthly trends, many months are actually almost back up to the pre-COVID level already for the Maldives. Now turning to the biggest geography for us, which is Europe and the Americas. We actually saw RevPAR decline over 70% both year-on-year and versus 2019. So Europe continued to see new waves of COVID-19 since about August of last year, and it has continued until about April and May of this year. But they're starting to reopen just about now, about mid-May, so we should start to see better trends going forward. If you look at in terms of the different geographies in Europe, the geographies that are actually doing better are the southern part of Europe, which is Spain and Italy. We're seeing improving trend. Whereas in the Northern Europe, because of the restriction of the mobility, in terms of the performance, it's actually a little bit worse than the Southern Europe. But then again, monthly trend, it's starting to -- we're starting to see better performance in April. And with the vaccination hopefully being distributed by September, we're going to start to see the reopening of the cities and countries in Europe. So hopefully, by the second half of this year, we will start to see much more improvement and traveling activities in Europe, which will directly benefit our portfolio. Going to asset-light business model. So MLR, or management letting rights, in Australia continues to be very resilient for us. If you look at in terms of RevPAR, it's actually up by about 8% compared to last year already. And if you look at the monthly trend in April, it's already passed the pre-COVID level in April 2019. So this continues to do well for us, and we continue to see positive EBITDA for MLR for second consecutive quarter already. For managed hotels, we've actually seen quite stable performance. RevPAR is down by about 45%. But if you look at the monthly performance, it's already passed 2020 level since about March of this year. So we're actually also seeing quite good trend in the management contracts. And so we are looking at expanding a lot of the management contracts going forward, especially with the limitations on our CapEx. For the hotel expansion pipeline, we are looking at over 60 hotels in 5 years. 16 of those are owned and leased hotels where we've actually made investments. So these are actually the commitments that we've made in the past. We don't really have any new hotels commitments at this point, but the focus is more on asset light or management contracts, where we're looking at opening about 45 hotels over the next 5 years. And the last business on the hotel side is the mixed-use business. So as I said earlier that residential has been very strong in the first quarter, and it's actually helped the -- uplift the overall profitability of the business. AVC, Anantara Vacation Club, also seeing recovery with growing membership in this quarter, about 5%. And also, the inventory to accommodate the membership has also grown by about 5%. So because of the good momentum, the mixed-use business is profitable at the net profit level for 2 consecutive quarters already. Now turning to the food side. Revenue of the food business is down by about 10%. Even though we saw the second wave of COVID-19 in Thailand since December, it's been quite resilient primarily because of China and Australia, which has helped the overall business as well. So if you look at the same-store sales growth, in the first quarter, it's actually down by about 15%, so that's primarily, again, because of Thailand. Whereas China and Australia has actually posted strong same-store sales with positive same-store sales growth. With the flat outlet expansion, we did have expansion of outlets in Thailand, especially for Bonchon and Coffee Journey brands. But because we're rationalizing in Australia, so the overall number of outlets has been stable. Because of the stable outlet expansion, total system sales actually track the same-store sales growth. Again, because of the tight cost control, we actually saw EBITDA improved by about 17% compared to last year. And the net profit -- we also turned to net profit compared to net loss in the first quarter of last year. And going into April, as you can see from the same-store sales chart, we're actually seeing improvement in both same-store sales and total system sales, and that's primarily because of China and Australia. Going into a little bit in detail of each of the hubs. So for China, we actually saw a big surge in February. Whereas if you remember last year, it was a low base in China because of the closedown of the [ facility ] at that time. But even that, if you look at same-store sales growth in the first quarter in China, it was down by about 50%. But first quarter of this year, it's actually up by about 75%, so it's actually passed last year's decline for China. So because of the strong consumption, we're actually seeing very good traction in China. And going into April, we also continued to see strong growth as well. In Australia, the trend is actually very positive. We're actually seeing positive same-store sales in Australia in the first quarter of this year. And going into April, again, part of it is because of the high base, but also part of it is also because the consumption is getting back on track in Australia as well. The only one hub that we're actually seeing a little bit of slowdown still is Thailand because of the second wave and going into the third wave of the COVID-19. Turning to Minor Lifestyle, very small, so I'll go through this very quickly. RevPAR is down by about 24%, primarily because of the fashion business that continued to be weak because of the slowdown of the consumption and because of the COVID-19 that's still hitting us here in Thailand. But because of the cost savings, we actually saw EBITDA turning to positive territory, and net losses improved from about THB 78 million to about THB 27 million. And lastly, on the corporate information. In terms of CapEx, we continued to look at reducing the CapEx over the next 2 years, so 2021 and 2022, to preserve cash, of course. And if you look at our debt-to-equity level, it's at about 1.95. And if you exclude the impairment that happened from the COVID-19, then the debt-to-equity is at about 1.88. We have already gone our waiver for the covenant testing up until end of next year. And then if you look at our equity base, we also have the equity coming in from the warrants 7, 8 and 9 of about THB 15 billion, which will also help strengthen our equity base going forward as well. So that should be good story for us. And of course, the TRIS rating affirmed our credit rating at A just last week. Now I'll turn back to Khun Chaiyapat on response to COVID-19.

Right. For our strategy to handle COVID-19, it hasn't changed from what I shared with you in the previous quarter. We continued to restart our businesses, looking to capture demand recovery that we expected in third and fourth quarter. But in the meantime, we still continue to preserve our liquidity and minimize our cash burn rate, like I mentioned at the very beginning of the presentation. Also, reduce breakeven point and strengthen our balance sheet to meet our financial obligations as well as the -- embrace long-term new normal. If you look at how we resumed our business activity since the COVID started and lockdown happened last year, we gradually opened our businesses in the second half of last year. But with the second wave hitting us and third wave hitting us, be it here or Europe, we have opened or closed our hotel as necessary. But at the moment, for Minor Hotels, 76% of our hotels are operational right now, while 24% still remain close. For Minor Food, almost all, i.e., 94% of outlets are operational at the moment. While Minor Lifestyle, we have 97% of outlets operational at the moment. We would continue to monitor the situation very closely. And we have to be agile and flexible according to volatile COVID situation, so we will keep close or reopen our hotel restaurants and make sure that it generates cash for us at least. In terms of cash burn and cost reduction, we still adhere to our disciplined cost control measure that we started since last year. That helped us reduce the flow-through of revenue shortfall and alleviate the adverse impact on our earnings. In the first quarter of this year, we managed to reduce our cost by about 36% compared with the first quarter of the prior year. This comprised the reduction of payroll of about 45%, leases expense of more than 75% and other operating expenses of more than 20%. So that still remains on the card. We have rightsized the workforce just to make sure that it's consistent with the business model that we have, be it part time or full time, and also permanent and temporary redundancy that we did. Also, we're trying to negotiate with the landlords to save our rent -- rental costs. Especially in Europe, we managed to negotiate with landlords and save a lot of rental expenses. And we expect that some of this cost saving in terms of payroll and leases will remain permanent after COVID as well, and that will help us to see a better margin when we have weather the crisis and back to normal again. So that's something that we think that in terms of cost efficiency, it's going to improve after COVID situation as well. In terms of CapEx, we have -- as part of our liquidity preservation, we slashed our CapEx. Like last year, we slashed by about 30%. This year, we slashed our CapEx plan more than half of the original level. And next year, we still believe that we're going to do it by about 30% to 35% in the next year. So we would try to only maintain maintenance CapEx only. And we still hold back some of the major investment that we can hold back for the time being until the situation improves. In terms of cash burn rate, if you look at the cash burn, it has improved over the past few quarters. The worst was in the second quarter of last year, where we saw cash burn rate of average THB 3 billion per month in the second quarter of last year. In the third quarter of last year, cash burn rate hovered around THB 1.5 billion per month. And then it hovered at that level in the fourth quarter of last year as well. But in the first quarter of this year, cash burn rate comes down to about THB 1 billion per month. So we've seen such improving trend, and we believe that this will continue to improve, as our operation, especially in Europe, will see some recovery in the third quarter and in the fourth quarter. We also have cash on hand and working capital facilities combined altogether of about THB 42 billion, comprising THB 21 billion cash on hand and THB 21 billion working cap facilities. That's enough to support our operation, especially with the improving cash burn rate that I just told you going forward. I would like to show you breakeven point for Minor Hotels. As for Minor Food, we have passed breakeven point already. As I told you, we have been profitable at Minor Food at NPAT level for 3 consecutive quarter already. For Minor Hotels, we have reduced costs so much that we can reduce our breakeven point to about 32% to 39% occupancy. But on the whole, in the first quarter of this year, our occupancy still hover around 21% on average, so still not yet at breakeven point being dragged mainly by Europe and Americas. If you look at Thailand, Asia, Middle East and Africa at the upper right-hand chart, it's almost there, we almost hit breakeven point, even though not yet at the moment. Australia, New Zealand, we have -- our actual occupancy have passed our breakeven point. We enjoy 70% occupancy for Australia and New Zealand, way passed 37% to 45% breakeven occupancy. But Europe and Americas, our occupancy still hover around 14% on the back or in the middle, like second wave and third wave that we told you earlier. So that still hold us back from reaching breakeven point. But we believe that the recovery that could happen in Europe, the mobility restriction that's going to be eased from May and June onwards amid the increasing vaccination rate in Europe, that will help hopefully promise to see a recovery trend in terms of occupancy and also the probability of hitting breakeven as well. In terms of balance sheet management, we are proactively taking all the actions to minimize downside risk among any volatility or short-term uncertainties that I just told you. While we're waiting the global distribution of vaccine, we have proactively managed our balance sheet at MINT and NH level. What we've done at MINT, we plan to issue corporate bonds of up to THB 6 billion is still well underway. We also get reaffirmed by TRIS of our A rating just recently. And also the asset rotation, the sale of assets to get proceeds to bring down debt is well underway. And also, the extension of debt covenant waiver has been approved by the bondholders up until the end of 2022. Also, the change in debt covenant calculation to exclude impairment from COVID from MINT's equity is going to be seen until 2024. We also issued 3 tranches of warrants, warrant 7, warrant 8 and warrant 9. That will bring in equity proceeds of about THB 15 billion over the next 3 years until the year 2024. At NH level, we have done a lot in terms of balance sheet management also. We have extended the maturity of our syndicated facility guaranteed by ICO, our Spanish state-owned bank, from 2023 to 2026. And we also extended the waiver of our covenant testing for both RCF and for ICO loans. For RCF, we extended covenant until December 2021, and we expect to relax covenant in June 2022 as well. For ICO, the extension of covenant waiver will go until June 2022. We also look to -- into other alternatives to do debts that's due -- to manage our debts that's due in 2023 as well. And as I said earlier, asset rotation is still well underway to help us deleveraging ourselves. And at NH level, they announced the issuance of rights offering, with target amount of EUR 107 million to be completed in the second half of this year. And MINT, as the major shareholder, remain committed as a major shareholder of NH. We will extend shareholders' loan to NH equivalent of the amount of EUR 100 million in the second quarter of this year. And that loan will be capitalized through NH's rights offering in the -- towards year-end as well. So that's balance sheet management that we've done proactively. The asset rotation, like I said, it's on track as planned. We expect transaction -- 2 transactions that will bring in about THB 10 billion to THB 15 billion. In terms of proceeds in the second quarter and in the third quarter, still on track. This will be the sales-and-leaseback and sales-and-manage-back transactions, something that we have already shared with you in the previous quarter. But this quarter, we just want to update you that we are on track, and it's on schedule to come through. Lastly, I would like to talk about long-term post-COVID world, something that we also have already shared with you. For Minor Hotels, we prepare for changing consumer behavior. We have to make sure that the hygiene measure and wellness, safety of our employees and our customers are key priority. We have identified 4 main areas to focus our long-term sustainable growth. We would deliver a better customer experience, continue to strengthen our brand equity; beat our digital transformation to connect with consumers better; and also balance sheet management that we talked about already; and the NH business plan. The recovery of NH is well underway. And then the integration of NH that we started to do pre-COVID, and post-COVID, we will see -- likely see synergistic benefits that we get out of Minor and NH more going forward. In terms of cooperation for Minor Hotels, we look operation standards, which include contactless service delivery. We focus on looking at the change at consumer expectation. We try to engage consumer more. Flexibility, personalization, loyalty, health and wellness or even F&B at our hotels are key priority that we will look at. And also, in terms of commercial, we try to get aspirational content to engage with customers always and market-by-market approach to direct users of channels where there is growing demand, primarily use of online service activity to grow booking conversions and also domestic travel fares. We also come up with tactical demand stimulation in the domestic markets and also in regional markets if demand start to recover. In terms of people, we review our organization structure, workforce planning that are to -- with the right size of our organizations to make sure that we will become more profitable when recovery take place. So that's what we're trying to do at Minor Hotels, something that, again, we've shared with you all along, but we just want to emphasize what we're trying to do now. At Minor Food, we will continue to make our brand equity improve going forward. We have to make sure that our brands, our products are still relevant to the new generation of consumers. We have a strong brand portfolio with the wide network of outlet, more than 2,000 outlets at the moment, including dine-in, takeaway delivery and also cloud kitchens as well. We also set up M-FIT team, Minor Food Innovation Team, to come up with new product to appeal to consumers and make it fresh in the market all the time. We are trying to improve our customer -- the connection that we have with our customers, be it customer touch points, the brand applications or websites or digital connection that we have with our consumers. We try to improve our platform on that front as well as customer service channels. And other enablers, we would try to do a lot more loyalty program, use more data analytics to predict consumers' desire and needs, not only today, but also tomorrow. We try to improve our delivery platform, our delivery. We have our own delivery platform that we can enhance more to compete in the market and also technology and operational system and training or backup clouds. That will also help us to see more cost efficiency and operational efficiency after COVID time. So that's basically the world post-COVID for us very quickly. I think we now -- in our presentation, we -- and we going to open the floor for questions that come online.

[Operator Instructions] Khun Soraphob, can you -- please go ahead.

Can you hear me?

Khun Soraphob, if you can speak up, unmute your line and speak up with your question, please.

Okay. Can you hear me?

Okay. While we wait for him, I guess, we'll...

Sorry, I don't know how to unmute. Okay. So for the first question, Chaiyapat, so we know that around 76% of your hotel are already back in operation as of April, right? Do you have this percentage for NH portfolio only?

Well, the latest information that we have roughly about 234 hotels out of 363 hotels of NH are open.

234 out of 363, isn't it?

Roughly, I will say.

And for this coming May, right, given that most of the European country plan for reopening, do you have any insights about how many more hotel that will open again in Europe?

Well, like I said, we expect that vaccinations will start to pick up pace, and the 70% of vaccination rate will probably end in this summer by September. So the hotel will gradually reopen once the restriction of mobility eased in middle of May or early June. So we will gradually see our hotels pick up pace in terms of operations and reopening.

So we should see more clearly about the positive impact of reopening in third quarter, right, once they go come, the international tourists, again?

Correct.

Yes. And second question is on your asset location, where you can -- is it possible to provide more detail about where the 4 to 5 assets that you already in an equipment for sale and leaseback. Is it NH? Or...

We wouldn't be able to disclose details at the moment, but if you look at our quality assets, they're scattered around the world, but the concentrations, it's pretty much in Europe. So you probably would have guessed that we have a lot of good quality assets in Europe in the gate -- in main gateway cities. So yes, as much as I cannot disclose much information at this point, but probable -- the chances are those assets...

That's like good enough in [indiscernible]. And 2 more questions, if you don't mind. So for the asset impairment, right, can you share -- in the first quarter, can you share with us where at this from mostly? Is it from -- mostly from Thailand or from NH portfolio?

Well, mostly from Europe portfolio because when we acquired -- well, for Thailand and elsewhere, the carrying value has been depreciated over time. So -- but when we acquired assets in Europe, we have done some of the fair value uptick. So there's a chance that those assets can have some impairment. But we likely see -- but taking into account all the recovery scenario that can happen, this is what we come up. Not only we, but also third-party valuer come up with the impairment amount.

I see. And last question's on the RevPAR performance in Thailand in April, right? The decline magnitude was quite similar to -- in March, right? So does it imply that if we didn't have the third quarter with '19, the RevPAR performance could have even been better than what we saw?

Yes.

Yes.

I see. And last question, [ Kim ] asked you to look at her questions on the chat line.

We'll do.

Okay. We'll start off with the questions in the chat. Can you provide more details regarding third wave impact in Thailand to the food and hotel business?

For -- like I said earlier, it's a short-term volatility that we expected. For food, we continued to beat up our delivery to alleviate any impact that happened on our dine-in business. And we hope that this restriction will going to be eased soon. Actually, it's already eased bit by bit, announced just yesterday as well. For Minor Hotels, we have to still adhere on our, like I said, ASQ businesses or even hospitality business. And we hope that with Phuket as the pilot province to going to open for tourists, they still confirm that it still remain on track to open by July. So we hope that in the upcoming quarter, we would likely see a better picture. But second wave, third wave that happened over here, something that we think that it could happen while we're waiting for vaccination. So first and foremost priority that we're likely to see is to get our people or Thai vaccinated as fast and as soon as we can.

Someone was asking for exact same-store sales decline for Thailand for Jan, February, March, April and May. So for Thailand, in January, February and March, same-store sales was down by about 27%. April is about 13%. And in May, we don't have the number yet, but it looks like it should be turning back to positive number in May. Can you elaborate on the QSR EBITDA growth? Can the margin be maintained after the situation normalizes? Would margin remain better than pre-COVID?

Yes, we hope so. As I said earlier, some of the cost savings that we've made during COVID, some of them will stay. The working -- manning -- working on manning power, the digital transformation and also the cost-cutting will help us to see better efficiency post COVID and better margin as well. Some of the cost control still, not only we did it last year, but this year, we still -- even though we have budget, we're also trying to minimize our corporate expenses as much as possible to see better margins.

What is the guidance of occupancy rate in Europe and the Americas in the second quarter? And it's pretty much the same type of question, what is -- what kind of demand do we expect for the EU hotel market during the upcoming summer season?

Well, we would like to see the recovery in the third quarter. Like I said, the gradual relaxation from mid-May or early June is expected. Occupancy will likely recover month by month. And the percentage of portfolio open will follow the same path. Currently, 70% of our European portfolios are open, but it will gradually open more and more. And we think that leisure travel would gradually bounce back as mobility restrictions are lifted, first, domestic and then intra-European cross-border demand. Both domestic and intra-European demand represents about 75% to 80% of our business in Europe, and business travel probably is going to follow suit. So the European hotel industry will take to -- will likely see recovery. But in terms of occupancy, we would probably not going to give any guidance at the moment, waiting to see the situation unfolds. But we have -- we think it's positive.

Okay. Can we expect more expenses after reopening hotels then negatively change to breakeven level after cost-cutting? So I think the question is, is the breakeven point going to go up?

Yes. Well, we have managed to reduce breakeven from pre-COVID level in the mid of our cost-cutting measures. But when business volume pick up, we also believe that breakeven point will also go up as well from the pre-COVID level on the back of increased business volume. But it's not -- that breakeven point is not going to be as high as pre-COVID breakeven anymore because, like I said, part of the cost-cutting are permanent, and that will help reduce some of the breakeven point, partially in the long run, too.

What is the outlook for property sales and AVC for the rest of the year?

We think it still remain positive. Property -- residential sales, we've seen a lot of demand during -- even in the mid of COVID period, a lot of strong domestic demand coming through. We're still in negotiation with some of the potential buyers. So we hope to see some of the finalization of more units coming through going forward. For AVC, like I said, it's been profitable for 2 consecutive quarters already at NPAT level. So we would likely see a pickup if there is any mobility restriction easing going forward. And if the cross-border reopen again, we will likely see demand pick up as well. So this is our hinges on our base case assumptions on the recovery that can take place in terms of border reopening, vaccination in the second half of the year.

Can you please share the RevPAR and occupancy outlook for Thailand and the Maldives, April and May?

For April and May in -- it's already in the presentation. For Thailand, April was around 23%, 24% occupancy. For Maldives, it still hover around 55%, 56% occupancy in April. And I think that still remains in May as well, especially the Maldives. But for Thailand, we have yet to see the number because we start to see third wave hitting in the late April and beginning of May.

Why is depreciation and interest expense jumped from fourth quarter? Is it due to lease payments? Yes. So fourth quarter, we actually had lower depreciation and interest because of the lease -- the adjustments of lease at the end of the year at an age. So because of that, because they had -- they paid less leases during the year and it was assessed at the end of the year, so it was adjusted in the fourth quarter. But I would say first quarter -- other quarters are more of the normalized depreciation and expenses levels. What is the amount of undrawn bank's credit line? So that's THB 21 billion of credit line left.

Yes.

What is the cash burn rate for the second quarter so far?

Well, we haven't had the number yet, but I would say it should hover around like the same level as first quarter or a little bit -- well, we haven't had the final number. But what we can say is that we hope that the recovery in the third quarter or fourth quarter that coming in, we held cash flow from operations and with the cost saving and CapEx reduction that we adhere. So rigidly, we hope that our cash burn rate will improve in the next quarter.

Please update the asset sales progress this year, as we've done that. But if COVID still continues [indiscernible], what about your plans over the next few years?

Well, we still have to -- like I said, we have managed our balance sheet quite proactively. And with the cash that we have in hand, working cap facilities that we have in hand, we still -- it's still sufficient for us to see the same level of cash burn rate, at least for the next year or 2. And besides, we have done like covenant waiver for a while, enough room for us to handle these uncertainties in the short term, too.

What's the debt due in this year and next year? And what is the plan to refinance?

Debt maturity this year roughly is about THB 11 billion. And next year, roughly, it's about THB 15 billion, THB 16 billion. Like we said, we have asset rotation coming in. We have bond refinancing that we are working on right now, so we think that we can manage.

Do we plan to subscribe to the NH's rights offering?

Yes. Yes, we -- as a major shareholder, we committed to subscribe what we entitled to.

We've actually announced that we will be giving the shareholders' loan of about EUR 100 million to NH in this quarter. And this money will be used to subscribe in NH's rights offering when the process is done. Will there be any more booking of asset impairments? Or it's done in the first quarter?

I think majority has been done in the first quarter already. We take into account the base case scenarios we think would take place going forward. And that reflects in the impairment estimate that we already booked in the first quarter. So the answer is unlikely to be any major incremental impairment going forward. And just to go back to the question earlier about the management of the debt maturity in this year and next year. This year, apart from bond refinancing and asset rotation, we also are looking to do some liquidity management on our perpetual debentures as well. But that's something to be updated at our -- in subsequent quarters.

I guess, the last question, we -- do we have a plan to get vaccinations for our employees, especially in Thailand?

Yes, we do. A lot of our employees in tourist destination like Phuket and Samui, they all get vaccinated. But elsewhere in Thailand, we're working closely with the government and the -- in order to get our people as a -- on a firm-wide basis to get vaccinated, started within Bangkok first and also other major tourist destination. So yes, we do have the plan to get our people vaccinated as soon and as fast as we can.

I think that's all the questions that we have.

Okay. Well, if there's any additional questions, please send it through our IR department. We would try to address every single question that you all have. And thanks a lot for your interest in Minor International, and thanks for supporting our -- for supporting us all along, especially in the mid of this tough time. And I'm sure that we will be able to weather through this crisis on the back of our plans, all the plans that we have, proactive move that we have in order to maintain our performance going forward. Thank you.

Thank you. See you next quarter.