Q2 2026 Central Retail Corporation PCL Earnings Call
Speaker #1: Today, I'm Ciprian Serrat, head of IR, and I'll be your host for today's session. And as usual, we have Kumbadev Mahakalira, our CFO, as our key speaker, and today he'll walk us through three main agendas, so business highlights, financial review, and the updated financial targets this year 2026.
Speaker #1: And now, นะคะ, for the main presentation, we will switch to Thai, but we have the live translation available for those who need it, so please switch your audio room.
Speaker #1: And all please kindly mute your microphone before we begin the presentation, นะคะ. And let me pass on to Kumbadev to start, ค่ะ.
Speaker #2: So, greetings. All the analysts and fund managers, and all the investors. For this quarter, our performance is great, I hope there will not be that many questions today, so I was, I want to firstly, summarize.
Speaker #2: In the second quarter, we have the top line core revenue grew by 3.6% and core EBITDA 20%. We will have, details in terms of the financial review later on.
Speaker #2: And for the core impact to owner, we enclosed at, 2.1 billion grew by 124% year on year. This page is actually, focusing on only in Thailand and Vietnam, so 124% is life-for-life for the two countries.
Speaker #2: For 2025, base with the Italy, included, we grew by 57%. 56 to 57%. From last year, Italy was also included. For the financial health, we will, talk about it later in, on the last page for the financial report.
Speaker #2: And we would like to recap on the first half. So we can see, some of the pictures and also the guidance that we will also, talk about it at the end of the presentation.
Speaker #2: The core revenue in terms of the numbers, 126.6 billion grew by 2.4% and core EBITDA 16 billion grew by 9.3%. And core impact to owner, we closed at 5 billion.
Speaker #2: Grew by 42.5%, including only the two countries. But with Italy, last year, it's going to be around 31% growth. And the gap between the core impact this year—um, first 6 months and last year—we actually have significantly larger numbers.
Speaker #2: By 1,000 and 200 millions, by including Italy. Next page. So this quarter, I would like to recap again for the great performance for this, this quarter.
Speaker #2: There are two parts. The external factors that, also helped. And also, other businesses that also gained the benefits from the, develop geopolitical tensions. But mostly are from what we have actually completed.
Speaker #2: Since last year. So this page, we would like to show, what we have done last year and that it results in a good performance this year.
Speaker #2: Briefly, last year we have the vested renaissance department store in Niankim, electronics. So we like to clean up the P&L. And for renaissance, it is a big, shift.
Speaker #2: Also, not only the two, companies, but also other brands or other businesses that, might not, perform well. We also adapted. And we have recently launched the, the program in Vietnam, and we also have numbers that we will be discussing in the next page.
Speaker #2: We also renovated to flagship malls. And we have turned new businesses that we have innovated, and we fine-tuned it into a proven business. And, ready to scale.
Speaker #2: In terms of the technology, we also included and also con- consolidated IT, software. So this year is about people, and last year was about the system, which, allowed us to have a lot of cost-saving efficiencies.
Speaker #2: Last year we have mentioned about this, several times. Because last year GP margin, we have strategically, swallowed, the, the GP margin in order to start this year for better GP margin and we would like to decrease the, debt ratio the net debt is reduced.
Speaker #2: From June 2025 to June this year. This has resulted in the performance of this year from what the management have, taken the action. We had the revenue, more high quality we would consider it as a high quality revenue that generated positive, outcomes.
Speaker #2: So we have higher elements and portion of the, the high quality revenue. And we have delivered the highest first half impact since IPO. Also improved GP margin across all the segments.
Speaker #2: From our initiatives. And also what I have mentioned earlier. We after, we have removed, the, Italy, we can focus more on the two markets.
Speaker #2: And focus more on the strategic acquisition and our businesses. In which we have, acquired JD Sports Thailand, and also taken over Eon Thailand. so we have already signed the contract, but we haven't fully, completed the process.
Speaker #2: And our, OPEX, operating expense to revenue, are still in control. And lastly, the floating fixed component of the debt, we will be talking about it later on.
Speaker #2: In which what we have continuously, working on for the past year. For the key business highlights, in terms of fashion. We have already mentioned about, rolling out the new businesses and also fine-tuning, the portfolio.
Speaker #2: Firstly, the KISS, beauty store. I will also mention about looks. So we've launched and also rolled out, both renovations and also opening new stores.
Speaker #2: And CMC, we have also added, new brands mainly amuse and Lacoste Thailand. That we have already signed the, the contract and the distribution agreement with ICC.
Speaker #2: as partnership agreement. In terms of tourist sales, it is continuously growing. Even though the international tourist arrival, is not, as expected. And hotline Auto One is also another, new business that we have succeeded that we launched earlier.
Speaker #2: Our target is around, 40 to 50 stores. New, new stores opening. So we continuously, working on it throughout the year. And for Niankim, we have already closed the transaction since, 23rd April this year.
Speaker #2: For food, the max value. As everyone might have heard, the news already. For property, the rental income grew by 5% in Thailand. And Gomal rental by 11%.
Speaker #2: And so overall 7%. So for the deal that we have just recently announced, we have signed a contract to, invest in the, max value.
Speaker #2: There are 23 supermarkets and 7 mini markets. So the reasons why we brought max value is due to several reasons. We will firstly, look at the strategic fit, which max value is, also under the core business of, CRC, which is the food retail segment.
Speaker #2: Also, that we have, acquired 30 ready-to-operate stores also helped a lot, reducing the time taken to, expand. Which would normally take about 2 to 3 years to build organically.
Speaker #2: The, the branches are also some of them are freehold land. And also, available spaces and we will look into the format and the time that would be suitable for, investing further.
Speaker #2: And what consumers are admired about the max value is the ready-to-eat food. So we are still keeping this, in terms of the people and also the facilities.
Speaker #2: Which will enhance our top fresh food offer. Also, there are 900,000 members. Under max value that will also ecosystem. In terms of the synergy, we already have existing distribution center also the logistics network to save the cost.
Speaker #2: And also the power. So we can successfully create a synergy in, in this part. So these are the main reasons that we would like to share with all the analysts and fund managers in terms of max value.
Speaker #2: And for the KISS and looks that I mentioned earlier, so skip to the next page. For Vietnam, there is only this highlighted product I would like to share.
Speaker #2: So for, for the renovation updates on the stores. In the fourth quarter, is the opening target. Which also has the most attached as well.
Speaker #2: And also groundbreaking for Fuyen. Which will be opening in the third quarter next year. For the one memberships. Just briefly, we have launched in the food business in Vietnam.
Speaker #2: Around 8 to 9 months. So the penetration is currently 80%. The, customers within the, the one program has already have higher ticket size by twice.
Speaker #2: So we are also starting to expand to have the one program in the non-food. into the fashion segment as well in Vietnam. So for, we have just recently launched, but we have already the sales penetration by 60%.
Speaker #2: And the spending per head is is increasing. Gradually. For the first 2 months, it's our good numbers and showing good signs. And so we still need to continuing to fine-tune So we are focusing on the powerful data that we will be using in that we have been using in Thailand.
Speaker #2: And for the recognitions and awards, I would just like to share in terms of the divestment of Renasciente. So this deal also received the best cross-border M&A deal of the year in Thailand last year.
Speaker #2: So, so we, we didn't hunt for the award. The important part is not about the award that we received, but many people might have seen that there is actually benefits received for CRC.
Speaker #2: Which given the management more focus. And also, it enables the, the leverage of CRC for the past years. From, from divesting this business. Without having to monitoring the FX.
Speaker #2: So we have always been having to focus on the FX and also the investment we spent on Renasciente. So for the financial review. This number, there are quite a few numbers showing on.
Speaker #2: So if we looked into the numbers for the core impact to order with Renasciente included, grew by 56.7%. And the gross profit by amount.
Speaker #2: Grew by 9%. While the cost to serve only 3%. So the operating profits expand by around 60%. There also share profits of 12% that also helped.
Speaker #2: So we can gain the benefits from the, from the joint ventures. Causing our EBIT to have significant growth. So for the interest expense, we saved by 17%.
Speaker #2: And also the tax increases together with the businesses. So the core impact to earner grew by 120, 24%. So if we looked in terms of the GP expand by 170 basis points in the second quarter.
Speaker #2: So the, for the first half is 1, 110 basis point. By segment. If, if we looked into Thailand and Vietnam, we grew by 2.6% in terms of the total sales.
Speaker #2: But if included NK. It would be 6 minus 3.6. Driven from the same store sales growth in this quarter. Which is showing good sign.
Speaker #2: 3% for food hotline zero and fashion slightly negative. The SG&A expenses in the second quarter is 27.4% which is, which is atypical quarter. For us that the percentage of the expenses compared to the revenue will be the highest for this quarter.
Speaker #2: So every year we are trying to manage to be under the guideline. The expenses that we have done is the personal expense that grew only 1%.
Speaker #2: So we have driven the sales. And the utilities. Grew by the rate that it has to increase. And marketing and promotion, we would like to make it lower but for this quarter we have launched new brands.
Speaker #2: And also brief up some brands. Within our business unit in CRC. So it's an intended spending. That that we wanted it to be lowered but it's not part of our concern.
Speaker #2: For this quarter, this is the first quarter that we have reallocated our brand business in Vietnam. From food. It was really small in the past and now we can see the gradual growth.
Speaker #2: Now it's, it's in the fashion segment. And most, some of the brands from food to fashion. So this paid food change a little. But the trend remains similar.
Speaker #2: For the food. Core EBITDA margin. Is 7.5% grew by 18 basis point. If we're not taking the fashion Vietnam, it would be around 7.4.
Speaker #2: But, but it's in, in significant. And for hotline, grew by 3 basis point. And for fashion, grew by around 1%. In terms of the core EBITDA margin.
Speaker #2: So it's a very good 6 months for CRC. If everyone has seen our net debt for this quarter. We close by 64.4 billions. Comparing to the same period last year.
Speaker #2: In June 2025, we have be able we, we have managed by 20 billion. So for this quarter. We have catch outflows that is a little bit higher than regular.
Speaker #2: Due to the seasonality. And also special dividends. From divestment of Renasciente. 2,500 millions. And we have also paid for the, the taxes for the capital gain from Renasciente.
Speaker #2: So So we are really careful and very concerned on the capex. And also focusing on the returns to all the stockholders. But we are trying to keep our leverage ratio to be healthy.
Speaker #2: So we are moving to longer and more fixed from last year. We had long term 32% and now we have increased to 46% and float reduced from around 90% to 60% in June this year.
Speaker #2: And the blended interest expense in the second quarter is 1.5%. In terms of the, the cost of fund and the our debt. Structure. So next page.
Speaker #2: For the guidance. I would like to share from last year I have already shared but I would like to recap once again for this year.
Speaker #2: The top line. We would like to revise down. To be more realistic estimations for this full year. The revenue would be around 2 to 3%.
Speaker #2: And the GP sales margin. Would expand around 60 to 70 basis point. Comparing to last year. And the expenses we are trying to control to be within 26.3% which is maintaining the same guidance.
Speaker #2: And the EBITDA growth. Expected to be slightly higher than the previous guideline. To be 6 to 8%. And the capex to around 12 to 14 billions.
