Erawan Group buys back some shares despite suffering losses in the new normal
Hotelier Erawan Group (ERW) has bought back 182,000 of its shares worth a total of Bt651,560 or Bt3.58 per share, the Stock Exchange of Thailand reported on Monday.
ERW shares have been rising gradually over the past two months. In December, the ERW shares were going for Bt3.60 apiece, up 3.44 per cent from Bt3.48. The ERW shares hit the highest point at Bt4.04 apiece and lowest at Bt3.36 apiece in December.
Yuanta Securities said it expects ERW to suffer losses of Bt1.5 million and Bt184 million in 2020 and 2021 respectively, before making profits worth Bt188 million in 2022.
The securities firm also expects ERW revenue per available room (RevPAR) to be at -70 per cent in 2020, +67 per cent in 2021 and +68 per cent in 2022.
Meanwhile, the group’s selling, general and administrative expense (SG&A) for 2020 is expected to drop by 38 per cent.
“Though ERW shares have risen in response to positive news about the Covid-19 vaccine, we expect the company’s performance to be gloomy until foreign tourists are allowed to travel across the country,” an analyst said, adding that the company’s revenue from domestic tourists cannot compensate the 70 per cent revenue lost from foreign tourists.
The analyst further added that ERW will have to raise capital if it faces consecutive losses.
At the end of the third quarter last year, ERW had Bt1.4 billion in cash and Bt57 billion in loans, though it was able to half its cash burn rate to Bt250 million from Bt500 million in the second quarter.
