Message from the CEO
2018 has been a turning point for U City. With great support from our shareholders, we successfully raised capital for the rights offering in order to acquire assets through the Entire Business Transfer of Unicorn Enterprises Company Limited (EBT of UE). We’ve been focusing on cultivating the value of our investments through continuous expansion of our hotels in the form of management contracts and operating leases, which require minimal support from shareholders. In addition, our residential for sales segment through the Sansiri JV has completed construction of 4 projects this year. Their construction was faster than expected. Over the past couple of years, we’ve been diligently implementing a clearly defined, long-term strategy to invigorate the Company as well as investing in our people. This is an initial blossoming of more shareholder value to come.
Total asset value grew by 34.7% to 54.0bn. Total revenues of the Company grew 56.6% to THB 6,976mm and EBITDA increased by 578.0% to THB 977mn. Both are new record highs for the Company. U City is well underway on a sustainable growth trajectory, with a favourable net D/E ratio of 0.55x and sufficient cash balance of 2,797mn for future investment needs.
Within our hospitality business, which is a main source of income for the company and contributed THB 6,009mn in revenue or 86.1% of the total. I’d like to draw your attention to the number of hotel keys in our portfolio, which grew from 8,275 keys in 2017 to 26,997 keys in 2018. Of this amount, 9,875 keys are currently operating, indicating a large pipeline of future revenue of 17,122 keys to come. One can clearly see the enviable growth of the Company, both in the past but also what is anticipated in the future. We’ve been assiduously exploring new approaches that aim to optimise our hospitality business and a series of these are in progress. These include treasury and tax solutions to ameliorate FX-related impact to our earnings and tightening tax efficiency. New partnerships have been formed between Vienna House and our associate, Absolute Hotel Services (AHS) to explore cross-migration of brands and drive synergies from deeper access to the Asian market; and between Vienna House and UBM, a leading hotel developer in order to tap into potential business expansion.
Within our office business, we continue to recognise steady revenues from our properties in the UK and Thailand. Altogether these have contributed THB 282mn or 4.0% of the Company’s total revenue. With Underwood Street completing major renovations, we expect future earnings uplift in this segment, as it is located in rapidly developing tech and startup hub.
The Sansiri JV has a significant backlog of presales of THB 17,981mn to be transferred in the future and we’ve launched a total of 3 projects this year valued at THB 12.7bn. Many more exciting, new projects are in the offing, encouraged by the development of Bangkok’s mass transit system.
We’re on track with our development projects, Phayathai mixed-use building and Verso International School. At the time of this writing, construction progress stood at 8% and 25%, respectively.
On behalf of management, I would like to extend my sincere gratitude to our shareholders, business and financial partners, customers and employees. Your continued trust and support is instrumental in the successes we’ve achieved and realisation of our future goals.
Ms. Piyaporn Phanachet
Chief Executive Officer
U City Public Company Limited