The Erawan Group (ERW) Q1 2025 earnings summary

Executive summary

• Achieved 7% year-on-year revenue growth in Q1 2025, driven by a diversified hotel portfolio, dynamic pricing, and resilience amid external challenges.

• Non-luxury segments contributed 65% of revenue, reflecting a strategic shift toward budget and midscale offerings.

• EBITDA rose 12% year-on-year to THB 785 million, with net profit up 21% to THB 345 million, supported by margin improvement.

• Maintained a solid financial position, supporting future expansion and resilience against market volatility.

Financial highlights

• Q1 2025 revenue reached THB 2,136 million, up 7% year-on-year; normalized EBITDA at THB 785 million (+12% YoY); normalized net profit at THB 345 million (+21% YoY).

• EBITDA margin improved to 36.7%; luxury to economy segment margin at 35.3%; budget segment margin at 41.6%.

• Budget segment revenue grew 29% year-on-year, with EBITDA up 40%.

• Net cash from operating activities was THB 566 million, down 22% YoY due to higher accrued expense payments.

• Leverage ratio improved to 1x, with average cost of funds at 4.03%.

Outlook and guidance

• Full-year 2025 group revenue growth guidance revised to 6%-8%; luxury to economy segment expected to grow 3%-5%, budget segment 23%.

• Q2 expected to be softer due to earthquake impact and weak Chinese, Taiwanese, and South Korean arrivals; recovery anticipated in Q3.

• Strategic focus on portfolio diversification, proactive pricing, and expansion in high-potential markets such as India and the Middle East.

• Plan to open 10 new HOP INN hotels in Thailand in 2025, with 3 already opened in Q1.