Initially welcome everybody for Analyst Presentation today. To wrap up and demonstrate our strength that we show last year, full year 2025, as well as performance of fourth quarter. We will have an outlook of 2026 in our presentation today as well. We have an honor of having Dillip, our Group CEO, to present to us all today. Before we start with the presentation, we would like to show the video. First will be the video of Minor Hotels, and second will be a video of Minor Food, just to see what we have been doing in the past several months. Before we start the presentation, please start the video for us. Now please welcome Khun Dillip Rajakarier, Group CEO of Minor International, on stage.
Good morning, everyone. Welcome to the 2025 Investor Day, the presentation today. Very much appreciate your continued interest on Minor International and the time you have taken to be here today, both joining us in person and also dialing in from overseas as well. As we all know, last year has been a tremendous year for us, a fantastic year in terms of performance, in spite of all the headwinds we've had, which I would explain a little bit later. Minor Hotels and Minor International and including Minor Food has been much more resilient and making us more diversified, and also with a more disciplined approach with our global hotel platform and also the global food platform as well. As we all know, our strategy is not just about growth. It's also focusing a lot more on what we call value-accretive growth to our shareholders.
It's about improving investors for return on invested capital and also building our sustainable compound earnings over the long term. We've always said that we will grow by net earnings of 10%- 15% or 15%- 20% on a CAGR basis. That's what we have delivered for last year and also the prior years as well. So it's a bit of a time, a reflection point for us last year, in terms of now moving more into an asset-light growth, which again, we will demonstrate what we have done last year in terms of setting the base for the coming years, and also what we have in plan for this year as well. I think looking ahead, we will continue to deleverage, which is something we've always said we will do. So that is in progress.
I will give you an update on how we are progressing as well. Also providing greater flexibility to enhance shareholder returns and through higher dividend payouts as well. We will be announcing our final dividend payout soon at the AGM, so I think hopefully all the shareholders will be happy for that news as well. Moving along, I think today, I will focus on three things today. So basically what we have achieved in 2025, then move on to how we are going to reposition ourselves for 2026. In terms of unlocking value based on what we have done in 2025. Finally, we'll walk through the financial highlights for 2025 and give you a little bit of color on where we are or how we have started 2026 as well. So let me start by looking at the successes on the development side for 2025.
2025, just to recap, it was all about execution in terms of very strict financial discipline, which we have done. We have delivered another year of high-quality earnings, both with core and reported profits growing by 16% on a year-on-year basis. The core EBITDA margin expanded by 33 basis points on a year-on-year basis, mainly driven by cost management and also improved operational efficiency as well using technology, both on the hotels and the restaurant sides as well, which we just saw the video. We have also lowered the interest burden, further supported by earnings, lifting our core profit margin by 81 basis points on a year-on-year basis. Operationally, we remain proactive in a portfolio, what we call Portfolio Asset Management.
Looking at Minor Hotels, we simplified the group structure through delisting of Minor Hotels Europe & Americas, which is something we've tried for three years, and we never gave up, and we were successful in terms of delisting Minor Hotels Europe & Americas last year in October, which will help us to enhance the flexibility to pursue long-term strategy and also initiatives, including the launch of the REIT as well. We unlocked some asset value through selective hotel disposals in Europe, and we deployed that capital into higher return opportunities, which we did last year. For Minor Food, we increased our investment in GAGA to strengthen the key growth engine and also formed a strategic partnership with Europastry to scale up our food platform to become one of the largest regional players in frozen bakery and dough market as well. In terms of expansion, Minor Hotels has expanded and opened.
Last year, we opened 23 hotels globally. We signed for the first time, Minor Hotels last year, we signed 40 management contracts, including some franchises as well, mostly or almost everything under asset-light. It was our highest ever signing for last year, where we signed 40 hotels last year. This year has started very strong. In Q1, we should be signing about 25 hotels in Q1. It's giving us a great momentum for this year. Hopefully for the full year, in terms of On the food side, of course, we maintain its leadership position through product innovation, lifestyle marketing, and also leading the share of social media engagement in spite of the softness in the market here in Thailand.
Moving to Minor Hotels, looking at Q4 2025, we actually completed renovations of our five flagship properties in Thailand, delivering a post-renovation ADR uplift of almost 20%-40%. That's a huge increase post-renovation, where, as I said, using capital where we are getting a much higher return in terms of return on invested capital as well, which clearly demonstrates the pricing power of our luxury positioning of our brands as well. Last year, we had about 12 of our key properties which were under renovation globally, including Anantara Siam here, where we have completed half last year. We just started the other half this year, so we should be fully completed by June, July of this year. When you come for the next analyst meeting, you will see a totally different ballroom as well here.
These initiatives increase the contribution of non-room revenue, including supporting higher repeated visitation and strong loyalty participation. For example, this hotel, we have really moved our ADR up. I was talking with the GM today. We are looking at an ADR on the new rooms of THB 9,000- THB 12,000 + going forward, which is a big uplift here. Another key highlight is the contracting. As I said, we signed more than 10 asset-light contracts in Q4 alone last year, spanning into Europe, North America, Asia, Middle East, LATAM, Latin America, and Oceania. Globally, our footprint is growing quite strong in all the regions. As I said, we are not focusing on signing the number of hotels, but signing sustainable quality of earnings. Some of the hotels we signed, like Europe, we signed one hotel in the U.K.
In the U.K., we will have one new hotel there. In Asia, we signed four hotels in China, one hotel in India, and one hotel in Thailand. In LATAM, we signed a hotel in Brazil. In North America, we signed two hotels in the U.S. This is going to be a great entry point for us in the U.S. In the Middle East, we signed one hotel and one branded residence in the U.A.E. and in Saudi Arabia. In Oceania, we signed one hotel in Australia. That was Q4. Looking at this slide here, 2025 also marked our asset-light expansion. Across 2025 and the first quarter- to- date, like I mentioned before, we signed over 45 new contracts in the key global markets, including the entry into the U.S. with The Wolseley Hotel entering New York for the first time.
Anantara, first time in Miami, entering Anantara hotel, and really high-end residences in Miami. The two flagships in the U.S., which will elevate our global positioning. Here in Japan, we signed the joint venture, as we know, targeting 25 hotels over the next decade, with a signing already of Anantara Karuizawa Retreat, which is scheduled to open in 2030. Japan is a joint venture which we signed, and we have already signed one hotel there with the Karuizawa Retreat, which will open by 2030. In Europe, we have expanded into the Mediterranean, which we just announced last week, where we have entered into Croatia and Slovenia for the first time again with Anantara and Minor Reserve Collection.
Minor Reserve Collection is another soft brand which we created, and under Minor Reserve Collection, we have one hotel coming in Slovenia, and under Anantara, one hotel coming in Croatia. These are rebrands. These are rebrands from other hotels. There is no delay in terms of greenfield. These hotels will start to open, or will be rebranded by this quarter. In Egypt, we have a new growth frontier, as we know, in Egypt, where we partnered with SUNRISE Resorts & Cruises. The target is to do 50 hotels over the next 10 years. That is another joint venture we signed, and it is an asset-light JV, where the target is to open 50 hotels over the next 10 years. Egypt is a big market, as we know, especially for the Europeans. It is a gateway, and it is a market where we have no presence.
We've gone into countries where we have no presence, like Japan, like in the U.S. and also in the Mediterranean, and now into Egypt as well. We've also strengthened our African footprint with NH Collection going into Tanzania and also Ghana as well. Again, NH Collection is spreading quite a bit nicely outside Europe and LATAM or the Americas, going into the other countries as well. In India, we have secured and we've signed three hotel management contracts. One was in Anantara Kolkata, Anantara Coorg, and the Avani+ in Vizag. Again, as we know, India is becoming a key market for us and is growing quite well, both inbound and outbound. We were very successful opening our first hotel in India, in Jaipur two years ago. Based on that, we are now picking momentum and signing more hotels in India as well.
Overall, the pipeline provides a strong multi-year visibility, and fee-based earnings without putting too much pressure on our balance sheet. This is more going into what we said in terms of our asset-light strategy, leveraging our brands and the equity of our brands. Moving on to food. The food continued to demonstrate the strength and scalability of its platform. During the quarter, we expanded regionally, particularly adding 40 stores domestically here in Thailand, and also 10 in Indonesia, under Dairy Queen, GAGA, Bonchon and Poulet. Innovation remains key focus on the food group. The GAGA has also launched a new specialty tea series, and we've seen the earnings and sales driving 10% on the cup sales in the same SKUs. Bonchon Korean fried pork has delivered 8% incremental sales, in its launch in the first month. Again, we're trying to revive or refresh.
We keep refreshing our brands all the time. Ramyeon also recorded 103% increase year-on-year, reflecting a strong consumer traction here in Thailand, whilst the broader market was still soft. We also introduced new brand concepts in Thailand. We launched Krob Krob Station and elevated the Thai street food concept, which is centered mainly around crispy pork belly. In Singapore, our innovation hub introduced what we call the Dim Sum Club, expanding dim sum alongside noodles, rice bowls, and desserts. Internationally, we entered India, the food side, with the launch of Scoop Wonder. I'm sure you know Scoop Wonder. We did try it out here in Thailand, which was quite successful, and we've rolled out Scoop Wonder in December in India. And also Sanook Kitchen was launched in January as well.
We partnered with a company called Devyani International, who is a leading QSR operator, positioning us well to scale the high growth in a highly population area as well, which is India. New concepts are helping us to attract broader consumer segments and driving traffic. Sizzler introduced what we call the upgraded Sizzler Special Salad Bar, featuring what we call the premium health-oriented options, and the Sizzler Sun & Moon, for the first-ever dual concept format, offering differentiated day and night menus, for Sizzler as well. The Pizza Company also launched a Pizza Company Express, a new grab-and-go concept, and a store concept, to target individual diners and convenience-seeking consumers as well. Overall, the innovation, new concepts and discipline expansion on the food group, will support both growth and also the balance in terms of relevance as well. 2026 and beyond.
2026 and beyond are aspirations. Looking ahead, we have some clear measurable financial ambitions, which we are showing here. By 2028, we aim to reach about 850 hotels and 4,150 restaurants. This is including signed contracts, open and signed. The expansion will be driven mainly by an asset-light strategy, selecting some of the new markets, which I explained before, and we continue to look at more of the new markets as well, and much more deeper penetration into high growth regions as well. Financially, our three-year targets remain unchanged. We are targeting, like I said, a high single-digit revenue growth, and a 15%-20% annual earnings growth and our ROIC at 12%. At the same time, also remain focused on the balance sheet, including successful execution of unlocking some of the initiatives.
We target the net debt to equity to be in the range of 0.75x-0.85x, and the net debt to EBITDA below 4x . That's our target for this year and beyond. I'm sure a lot of you will also ask me about net debt to equity, including Perps. At the moment it's about 1.7x- 1.8x. We hope to bring that down to about 1.4x in the coming years. Moving on, when we look at the hotel pipeline, our expansion strategy prioritizes what we call quality over quantity or the number of hotels. Instead of saying that we have the largest number of hotels, we would love to say we're the most profitable hotel brand globally.
I will also show you why in the coming slides, because we've had some of the larger brands have actually published their results, and I can compare how we are benchmarking against them as well. By 2028, more than 50% of our portfolio will be asset-light. That doesn't mean that we're not going to grow assets. We will continue to look at stronger base return investments, but at the same time focus more on asset-light, which is signing more management contracts and moving more into franchising as well. Franchising is something which we've launched last year, and it's starting to take some momentum this year. Next year we will see a stronger momentum signing more franchise contracts as well. Geographically, we continue to deepen our presence in established markets, including North Africa, like Morocco and Egypt, like I mentioned. Egypt, we've signed.
Morocco, we are pretty close to signing something as well. Also North Asia, like Japan, South Korea, and Middle East and the Caribbean. Middle East, including Saudi Arabia as well. The Caribbean also, we're looking at Turks and Caicos, and some of the other Caribbean regions as well. From a brand perspective, our luxury and premium brands like Anantara, Tivoli, NH Collection, are expected to grow at an accelerated pace given the rising brand recognition across the multiple markets in Europe and also in Asia as well. This strategic fit will help us to balance our portfolio across most of the geographies and also the brand tiers as well in terms of really driving that asset-light growth. The next one is to look at the new additions. Just want to show you some of the new hotels which we've signed, or which will open in 2026.
For example, for the first time, we have Anantara Kafue, which is a tented camp. Anantara is also going now, because we do have a brand which is called Elewana, which focuses around safaris and tented camp. We now have Anantara also now going into a very exclusive tented camp in Kafue in Zambia, which is 12 keys, and this is managed. We have Kota Kinabalu, again, which is opening in Q2 2026 with 352 keys. Again, managed. The same quarter we will have Tivoli in Muscat, in Oman, 130 keys managed. Tivoli in Bahrain, in the last quarter, about 95 keys and 107 keys because we have a Tivoli and an Avani, which again, will be managed as well. Avani in Vientiane, again, will open in the second quarter, almost 200 keys managed.
The first Avani Hotel, full service hotel in Mooloolaba in Australia, will open in the second quarter as well, 160 keys and a franchise hotel. It is a franchise. We have about seven franchises already in Australia, so we are growing quite well in Australia on the franchise side. Again, this is asset-light. Then we have Anantara Xiling in the Snow Mountain. Again, a managed hotel in the last quarter. NH Collection in Malta, it is a new country, new entry, 181 keys franchise. In the second quarter, we have the Tivoli Palácio de Seteais, which is 45 keys, again, under managed contract. As we can see, all these are managed or franchised under the asset-light model. It does not put too much pressure on our balance sheet. Looking at the global travel demand. Again, here, I am sure there is a lot of concern about travel demand.
There are concerns about currency, Forex. There are concerns about trade wars. There are concerns about trade, the taxes. We believe, and we have seen in 2026, that the global travel remains quite resilient. Q1 also, we have started Q1 with a good head start, which means global travel continues to be resilient and continues to benefit from higher rates as well, as long as the strategies are the correct one in terms of driving our rates up. In Europe, the leisure business travel continues to show solid momentum with robust calendar events throughout the year, as we all know, the Winter Olympics, the Grand Prix. In Minor Hotels, we have presence in major urban gateways, cities, which will help to benefit from these events as well.
In the Middle East, the leisure demand is supported by improved air connectivity as well and the national tourism initiatives, which they are doing, which continues to gain momentum in the Middle East. In Thailand in particular, we will benefit now from a proactive government, in terms of tourism initiatives, increased flight capacities, and major regional high-profile events, which will also drive incremental demand for Thailand as well. We saw Thailand, two years ago, how the demand rose up when we did The White Lotus. The demand continues to be there, and the demand continues to attract high-end travelers as well to Thailand, which is great. Which means we are getting higher rates, and also long stays as well. In Australia, the domestic events again are supported by some of the major sporting and entertainment events, including the Australian Open, the Formula 1, which is also helping us as well.
We have seen that coming through our demand drivers in these countries as well. I think for us, 2026, some of the headwinds, the key headwind, on 2026 is the Forex. Apart from that, because we see the continuous weakness of U.S. dollar. Apart from that, I think all the other indicators are quite strong. As we have seen, we started January and February. Both January has been a very strong month compared to last year, and February has been pretty good. Even the Chinese New Year has been quite good for us as well. Moving to the next one, in terms of strong growth in branded residences. This is something where we are really leveraging our brand strength, which is branded residences. Branded residences, the market itself, is rising globally because of the wealth creation and the growing demand for experience-led living.
As we all know, most of the high-end brands have created residences. We were one of the first to create branded residences, back in the early days, even before Four Seasons had branded residences. Our branded residences in Samui was at the Four Seasons, when Four Seasons didn't have branded residences. We called it the Estates. Our branded residences in Chiang Mai at the Four Seasons, call it the Residences in Chiang Mai, the Four Seasons. Also the branded residences at The St. Regis. Those were our initial step into branded residences. We then, since then, we have launched our own brand of residences, which has been very successful. For example, Layan. We are into phase three now, and I will show you the branded residences, how it's contributing, and you will see the contribution as well.
Again, this, yes, it has a capital drain in the initial years, but as soon as the project is complete, we see a 25%-30% return on the capital investment as well, which is quite attractive when we do branded residences. We have many of the branded residences project, both here in Thailand and also outside Thailand as well. In the Middle East, we have signed quite a few. In Dubai, we already have branded residences. We are signing more. In Malaysia, we have. We continue to expand the branded residences, which we see that even on a standalone basis, these branded residences can be highly lucrative, giving a very strong return. This is the growth of the branded residences market. This gives you a flavor of what the branded residences are doing today. I think it's another segment.
It's another vertical which we have leveraged ourselves, in terms of taking advantage of the growth. The next one is our pipeline on branded residences. This gives you an idea of what we are doing. The first one is 2026 and beyond, unlocking value. As you can see on the left-hand side, our branded residences product is highly capital efficient. The IRRs are up to 30%, so very strong IRRs. We have the Kiara, the branded residences, the phase three, which was launched in 2024. 2026 is when we will start to complete our completion of sales or signing these new contracts, which we already have sold Ubud, again, we have 15 villas for sale, and we will start to sell them this year. Four Seasons Samui, we have three units, which we are done. Again, we will start to sell them this year as well.
Then we have another 500 Rai project in Thailand, which is at Layan, the same place, where we will continue to expand phase four, phase five, again, giving us very strong returns and also strong for the brand as well. On the right-hand side, you see the branded residences where we have signed on a fee-based basis. Here we have no investment. We only are branding. Anantara Miami, again, is branded residences, which will complete in two years. Oaks Riyadh in Saudi Arabia, again, launched. Tivoli in Muscat, the Tivoli and Avani in Bahrain. Anantara Zanzibar is also branded residences and hotels, which we are selling. Anantara Ras Al Khaimah Resort is the hotel which we launched two years ago, and the hotel has been very successful. The owners have launched branded residences, Anantara branded residences, which actually sold within a week.
That's how much demand there is for branded residences in the Middle East. Then we have NH Collection Ras Al Khaimah, again, another fee-based project. Some of these branded residences can get us fees up to $15 million-$20 million each on the residential side, based on each of the projects. The pipeline is very strong, and I think it's growing quite well. We will continue to focus. The regional focus is Middle East, Africa, of course, Asia, Europe, Latin, U.S., and the Caribbean as well. This is purely on branded residences. The next one is on the food side, which is continued food expansion with asset- light. Similar to our hotel asset- light strategy, the expansion remains central to Minor Food, the growth model as well.
By 2028, our franchise outlets will account for a larger share of our network, supporting the margin stability and also strong cash flow generation as well. Geographically, we are prioritizing high growth markets such as India, Indonesia, alongside continued expansion here in Thailand, and also the broader Southeast Asia as well. The Coffee Club has gone into Africa. The Coffee Club has gone into the Middle East. Both in Africa, it's mainly a franchise model, which is good, so which we will continue to expand those markets as well. It's moving more into an asset-light model by region. The next one is Minor Food as a leading restaurant platform in APAC. As we know, Minor Food positioned itself as a multi-brand restaurant platform with growth potential.
We operate a mix of owned brands, which gives us strategic flexibility and control, alongside some of the franchising or franchise brands which we manage as well, which helps us to enhance scale and also capital efficiency as well. In most markets today, as we see on the right-hand side, we hold number one position across the key categories, whether it's pizzas, whether it's desserts, whether it's Korean fried chicken, and also which reinforces our strong presence and leading into some of the major consumer segments. The centralized procurement has strengthened our cost discipline, which has really helped us in the last few years.
In spite of costs going up, we've managed to keep our margins quite tight, mainly because of centralized procurement and also the ability to be the best in class in terms of operational know-how and also the hubs where we can start to roll out our brands, which are much more standard way as well. These advantages actually will translate into what we call a superior unit economics. As we said, Minor Food also has very strong aspirations to get to about 4,500 outputs by 2028. Moving on to how Minor Food is elevating its core brand and scaling expansion, both on the innovation side, on the expansion side, with the help of digital initiatives. On the growth, we will continue to be driven by the three key pillars, like we said here.
On the menu side, we will continue to enhance the creativity, add new concepts, new product developments, and also compelling value offerings as well. Because as we see the Thailand market softening, people are looking for more value-driven food. This is something we have also gone into, and we are helping as well. Say, for example, like when we launched Sizzler, we have Sizzler, and then we also launched The Steak & More, which is more of a value concept, value meal, which has really good quality because of our procurement chain. But at the same time, we are playing with high value and low value ticker checks as well. In Thailand, the expansions include Dairy Queen, The Steak & More, GAGA, Bonchon, and The Pizza Company. Internationally, Indonesia is emerging as a strategic hub for us. Indonesia, we went in with Dairy Queen, which has done really well.
We are opening more outlets now. We've also now introduced GAGA in Indonesia, which has also taken off quite well. Therefore, we are really spearheading that and expanding into Indonesia quite strongly as well. India is another market on the food side, where we are expanding with a local partner. Also we will accelerate the rollout of Sanook Kitchen to capture another strong potential in India as well. In CLMV, Vietnam and Laos remain key markets for asset-light expansion on the food side and the digital initiatives are also enhancing both the revenue creation and also the operations efficiency as well. At the store levels, technologies such as we've introduced order at table, we introduced pay at table, we've introduced QR ordering, we've introduced kiosks to improve the customer convenience and also accelerating our table turns and enhancing productivity as well.
The next slide is to talk about profitability expansion roadmap. The key drivers include here is cost efficiency, lease optimization, high direct bookings, and asset-light expansion. Together, these initiatives will improve us to drive both EBITDA and continue to drive NPAT margins or net earnings up to throughout 2028 as well. So we expect the margin expansion to accelerate towards the latter part of the year or the three-year plan, in terms of when we start to really see the asset-light expansion taking shape and really gaining momentum, both on the management contracts and also on the franchising side as well. In addition to this, the lower cost of debt and continued de-leveraging will further support our core net earnings and enhance our overall earnings quality as well.
As we continue to deleverage, we will see our cost of interest coming down, which will help with our net earnings going up. The next one is to give you some progress and some color on how we are unlocking. We have the unlocking of the REIT IPO, which we have announced last year. It is on track. It is progressing quite well. And the target is the second half of the year on the REIT side. We have been debating whether it is going to be a S-REIT , whether it is going to be a T- REIT. And we have come to a conclusion that it has to be a S-REIT . Therefore, we are moving fast on that, in terms of getting the regulations and paperwork finalized and submitted this quarter, which will help us to launch by the second half of this year.
We are currently structuring the REIT with targeted gross asset value of over a billion U.S. dollars, comprising assets here, mainly in Europe, and also Thailand. Some of you might ask, why? I think we earlier said it would be about $1.2 billion, the REIT value, but we have dialed down to about a billion to ensure we have the assets, where the asset values are enough for us in terms of REIT realization to reduce our optimum size of the debt. Therefore, we have now come to a billion. And some of the assets which were a little bit difficult to put into the REIT in Singapore, we have taken it out and to make sure that there is no delays in terms of launching the REIT, and therefore that has also reduced the REIT value to a billion.
In terms of the yield, we aim to position the REIT in line with the upper tier of the hospitality REIT companies in Singapore in the SGX. Importantly, the yield would yield below our current cost of capital, which will support our overall capital efficiency. Some of you might ask, the cost of the yield on the REIT might be a little bit higher than cost of debt, but we actually look at cost of capital, which includes cost of equity as well. So when we add cost of equity, paying recycling assets through the REIT is much more beneficial and it makes our balance sheet look much stronger and it makes our earnings also look good. And therefore, we have actually looked at the total cost of debt, in terms of launching the REIT.
From a financial perspective, we anticipate a material balance sheet strengthening, and continuous year-on-year EPS growth post REIT IPO. The target is to ensure that we deleverage, and the target is also to ensure that we increase our earnings per share in the coming years. Post-transaction, the deleveraging will lead to a lower cost of capital over time, driven by stronger credit metrics and also lower company specific risk premium as well. I think the deleveraging is a strategy we have always been focusing on prior to COVID. During COVID, we accelerated some of the deleveraging strategies, including asset rotation, sale of assets, which has really helped us in the last few years and also brought our interest costs down. And this one will further strengthen our balance sheet, going forward in the coming years.
The REIT will enable us to add assets or put into the REIT, where Minor International might not be able to meet from an earnings perspective, but it will fulfill the REIT criteria, which will also help us to grow without putting too much capital or without using our balance sheet. The whole point is for the REIT to keep expanding and the REIT to continue to grow so we can inject more and more assets, which we can manage in the coming years. The next one is, 2025 recap. I think most of you have had a chance to look at it, look at our press releases, and also what we have announced in the market. As we all know, the fourth quarter 2025 demonstrated a strong underlying momentum. Minor delivered a core revenue of THB 43.8 billion, which represents a 5% year-on-year growth.
This was delivered both by the hotels and restaurant performance. At the core net profit, we achieved THB 3.5 billion, which was a strong growth of 21% year-on-year, with the ability to capture demand and also benefit from lower interest rates following the reduced cost of funds. That is Q4. This is Q4, where we have seen a strong momentum in spite of some of the markets actually being a little bit soft, in spite of having some of the currency headwinds as well. The growth has been very strong for us in Q4. For the overall 2025, this is 2025 full year. The full year, the core revenues reach THB 165.5 billion, which is a 3% increase year-on-year on a constant Forex basis.
The core net profit increased, as we said before, 16% year-on-year to THB 9.7 billion, again, reflecting a strong hotel performance and improved food earnings, with effective cost management and also reduction in finance costs. The 16% profit growth was in line with the guidance which we provided to our investors, reflecting a strong execution against what we had as our targets. In spite of, as I said before, a lot of the headwinds, our key properties under renovation, currency headwinds, some of the global meltdown, whether it is trade wars, whether it is the taxes, but we have managed to actually disclose a 16% growth on profit year-on-year for Minor International as a company. This slide is quite interesting actually, because for Q4, the hotel performance. Here you see by region. We show by region, the RevPAR by region. Europe and LATAM, RevPAR grew by 6%.
Thailand, the RevPAR grew by 15% year-on-year. For the Maldives, again, has been a very strong quarter. The RevPAR grew by 13%. The management letting rights, predominantly in Australia, our RevPAR grew by 6%. Our managed properties, our RevPAR grew by 10%. That gives you a pretty good color in terms of how the strategies and the rates we have managed, whether it is in par with occupancies and how we have grown the RevPAR quite high. Compared to our peers who are 4%, 1.9% and 0.5%, our RevPAR growth was more than double. It is 9.2%, the RevPAR growth for Q4. That gives you an idea in terms of how the RevPAR has grown. It is a 9.2% growth, which is higher than everyone. On the fourth quarter, the RevPAR, the growth was very strong as we see.
The owned and the leased portfolio, both in Europe and the Americas, RevPAR increased by 6%, like we saw down, with predominantly led by ADR increase. ADR growth was 4% of the 6%. In Thailand, our RevPAR was 15% growth, driven by ADR, following the flagship properties and strong performance in some of our resort destinations and some of the renovations actually coming into fruition as well. In the Maldives, we maintain an exceptionally strong growth. The RevPAR in U.S. dollar grew by 13% year-on-year. What we did was we diversified our markets into Russia, U.K., Germany, and the U.A.E., which actually helped us to grow the RevPAR. The Australian performance has improved with higher average room rates. The strong school holiday also helped us as well. Our managed hotel recorded RevPAR growth of 10%, which is quite high.
We are recording almost double- digit or high single-digit RevPAR growth across all the markets. That is for Q4 of the hotel performance, you see. The 2025 hotel performance, the full year, again, remains quite robust, with Europe growing by 5%, Thailand growing by 5%. This is full year. In spite of Thailand, as we know, in 2025, we started with the Chinese kidnapping, then we had the earthquake, then we had the floods, we had the trade war, we had the political instability. In spite of all that, Thailand for the full year, still showed a 5% RevPAR growth for the full year. The last quarter of Thailand grew by 15%. You can see how the RevPAR is starting to ramp up. Maldives grew by 19%.
Our properties in Australia, which is in management letting rights, grew by 2%, and our managed hotels were flat. On the food side, the food delivered a 4% year-on-year growth in the fourth quarter. Mainly, the growth was attributable to top-line improvements starting to see in China, Australia, and together with the better contribution from our joint ventures. Thailand recorded same-store sales and total system sales decreased by 3.5% and 1.7% year-on-year. Mainly due to the government co-payment system, which actually excluded the chain restaurants and diverted spending into local operators. That had an impact on our sales here in Thailand for the food group. Nevertheless, the brands such as GAGA, Burger King, and Bonchon maintained a positive momentum with stronger sales growth. Internationally, the same-store sales growth declined slightly by 1.8%. As China improves, Indonesia and Vietnam couldn't offset the balance of the other portfolio internationally.
Despite this, the total system sales increased by 0.6% year-on-year, where it is continued to see a network expansion as well. On the bottom line, the net profit rose to 6% year-on-year, with the net margin improving to 8.6%, which was above last year, which was 8.4%. The improvement was supported by stronger profit sharing through Thailand and enhanced cost discipline in China, particularly on the labor side as well. The next slide, we show the food performance for the full year. The core revenues increased by 4% year-on-year on a constant Forex basis. The Thailand same-store sales declined by 1.7%, as I said the reasons before, with the softer sales we have seen because of the government co-payment system, which we didn't benefit, and that had an impact as well.
Also, the earthquake also had an impact as well, and the floods in Thailand also had an impact on the Minor Food group as well. Looking at core net profit, Minor Food reported 6% growth year-on-year at a constant Forex to about THB 2.6 billion for the full year. The next one is all about CapEx, allocation of capital for growth. We expect the CapEx to hover around THB 15 billion-THB 16 billion, and mainly a lot goes into the branded residences, the development which we sell, which gives us a very high ROI. This also includes hotel maintenance and upgrade CapEx as well, which actually has a payback, which we have demonstrated in our RevPAR growth. As I said, our RevPAR grew quite strong in Q4, mainly because of some of the CapExes, where we spend money and we have managed to increase our rates.
I think we continue to be focused a lot on CapEx to make sure that the CapEx is controlled in terms of from a cash flow as well. Most of the CapEx projects will be driven by ROI and also supporting a higher margin as well. The next one is on deleveraging and capital allocation. The net debt metrics will continue to improve. Interest expense declined 17% year-on-year, and the cost of debt fell to 4.28%. This creates a flexibility to deleverage further and also return value to our shareholders in terms of higher net earnings as well. Our net interest-bearing debt to equity stood at 0.86x. Our net debt to EBITDA stands at 4.6x as at the end of 2025.
It is slightly higher on a year-on-year basis, mainly due to some of the cash which we used for the delisting of MHEA last year, and also the interim dividend, which we paid out. However, on a quarter-to-quarter basis, our leverage metrics improved and supported by reduction in interest-bearing debt. By the end of 2026, we see the net debt to equity coming to a range of 0.75x-0.85x, more towards the lower and the net debt to EBITDA coming below 4%. Bringing that below 4% as well. Our debt profile on the fixed funding has increased to 58% at the end of 2025 from 55%, so fixed to floating. We continue to maintain a higher fixed rate exposure given limited room for further rate cuts by the central banks, including ECB and also BOT as well.
In addition to this, Minor has been able to issue a fixed rate Thai bond at a competitive price, enabling us to lock in attractive long-term funding as well. That gives you a color on how the net interest-bearing debt to equity is managed. You can see it is coming down. It slightly went up the last quarter last year because of the MHEA delisting, and also some monies going into the dividend payment as well. But it continues to decline in the coming years, and we hope to bring it down to about 0.75x to close to about 0.75x. The net debt to EBITDA, the target is to bring it below 4%. In summary, 2025 was a year where we have delivered some very strong performance in spite of some of the headwinds we have had.
We're entering a new phase in 2026, more moving into what we call scalable fee income on an asset-light basis, unlocking asset value through REIT, and growing through disciplined growth, through even branded residences, fee income on that, franchising, on the food side, more into asset-light growth into some of the new markets, and diversify our risk portfolio a little bit from Thailand to outside as well. 2026, looking ahead, we will continue to deleverage, providing a greater flexibility to enhance the shareholder return and higher dividend payments as well. On that, I'd like to thank you all for listening. That concludes my presentation, and happy to open up for Q&As. Any questions?
Thanks, Khun Dillip, for the presentation. May I ask what will be the maximum yield you are willing to offer for REIT?
Sorry, what is the maximum?
Yield on REIT.
That is something we are working on because of course it is going to be an S-REIT. We need to be competitive with the others big S-REIT, like CDL and-
Yeah.
like that. We think it is going to be higher 6%.
How much of the hotel assets in Thailand and Europe you plan to inject into the REIT?
The plan now is to inject about 14 assets. 12 from Europe and two from Thailand.
Okay.
Earlier we had a plan of doing Maldives, but Maldives became a little bit too complicated. We took Maldives out, and now we are just focusing on Europe and Thailand.
I see. How that would affect your future hotel revenues?
Actually, when you look at the REIT, we will still own 49% of the REIT. We will have control. I think, yes, there will be. I think we are trying to manage it carefully to ensure that we do not see a sudden drop. But I think overall, we will manage our EPS going upwards. The first year of the REIT, because of the structure of the REIT, we may have to write off some of the costs, which will have an impact in 2026, just one-off cost. But then, on a core level it should be fairly flat and growing upwards.
Okay, I see. Since majority of the hotels would be in Europe, would it be better to be listed maybe in U.K.?
We looked at it. We actually did the exercise. We've been looking at this exercise, not this year. We started two years ago, in terms of identifying the best value proposition for Minor Hotels and Minor International as a company. We looked at bringing a shareholder at NH level or at the European level. We looked at doing some of the asset recycling, then we looked at REIT. The REIT gave us the highest IRR, then we looked at different countries as well. Of course, our first preference was Thailand. But then Thailand became almost difficult in terms of launching the REIT, because the REIT is not seen as an equity instrument here. But we also saw the S-REIT much more attractive because there is more investor base, and there is more capital flowing there from the Asian markets, which will help us as well.
I see. And of the $1 billion REIT, how much you plan to pay down of debt?
The plan is that the majority of the funds will go to pay down debt. And of course, we will have funds available for expansion, because I think it is important that we pay down debt, at the same time, we continue to grow as well. But most of the growth will come through asset- light. So our feeling is that the majority of the funds or the proceeds will go to pay down debt.
Since you plan to hold 49% stake in REIT, so REIT will not be consolidated into main financials?
It will be, because technically, we will have control. We could consolidate.
I see. How much fee you expect to earn from managing the REIT?
That's something which is being finalized. We are now setting up the structure. We have set up the entity. We are bringing in the people, because you have to have people based in Singapore. We should be filing our REIT papers before the end of March.
Oh, I see. On the hotel business, how much RevPAR you expect to see in 2026, and what will drive it, from occupancy or from room rate?
The main driver of the RevPAR, because of the renovations, will continue to come from ADR, from rate. Like same as last year. Last year, you saw our RevPAR growth compared to our peers, which was way high. This year, I think we will see a fairly close RevPAR growth, maybe anything from 5%-10%.
Which market will be your key driver?
All the markets. Asia will continue because of the renovations done here. As I said, we had 12 hotels under renovation last year, which actually impacted our top line. That is one of the reasons we did not see enough of a top-line growth. For example, this hotel, we suffered a lot because of the works. We will suffer this year as well for the first six months. But the others have started to come in, and we see the growth. Most of the growth, as I said, will come through Asia, because you see Thailand has produced like a 15% RevPAR growth. Maldives will continue to grow stronger. Maldives, I was looking at Jan and Feb numbers, which is very strong, even compared to last year, which is on a higher base. Europe continues to grow, in spite of all the noises we are hearing.
Some countries are also imposing a sort of tourism tax or whatever, because there are some concern about over-tourism.
Yes. Yeah. This has been on for last two years, right? Spain did that, Barcelona did that. Amsterdam has introduced a city tax and tourist tax. People are still traveling. Our city tax is EUR 10 per night. Compared to a rate of EUR 200-EUR 300.
Okay.
If you have to travel, people will travel. They are not going to be too much worried about the taxes.
I see.
Over-tourism might be an issue, but again, most countries are controlling it, and in a way, it benefits us, because it benefits us that we are in the higher segment. At the higher segment, that is the income the government wants. It is not the lower segment where people come, pay really cheap rates, don't spend any money, abuse the environment, and leave. In a way, it actually plays to our benefit.
Okay. Thanks.
Barriers of entry also plays hugely to our benefit because if you look today in Italy, you cannot build any more hotels. You will not get license in the key cities like Florence, Milan, places like that. No more hotels, which is great.
Okay. My last question would be, what is your biggest concern for this year?
I think the headwinds we are facing, one is the Forex, and the other one, of course, is the geopolitical climate, which we have to navigate almost on a daily basis. Because from one week to another, things change quite rapidly. The good thing is, our system is so tight and so efficient from the organization level, where we are able to be much more agile and much more faster, making decisions much more quicker as well. So that has helped a lot.
But you are not concerned about the launch of REIT?
Beg your pardon?
The launch of the REIT in Singapore, you are not worried about how-
No. I am happy, that we're launching the REIT because that helps us to de-leverage.
What would be your alternative?
The alternative is, we've looked at other alternatives. We looked at asset recycling. We looked at bringing an investor at the MHEA level. We looked at selling assets on hold. That has, compared to a REIT, the REIT was the most effective, gives us the highest IRR on a continuous basis for Minor. That's the reason we actually choose REIT as the option.
You mean you are going to do just one of them, or you can do both? Like food IPO or-
As we all know, there is two things, right? In terms of the roadmap. Number one was the REIT, which is progressing much faster. That will happen by second half of the year. Of course, we are looking at food IPO, and we are exploring options to see. At the end of the day, we look at what is the best value add to our shareholders, and is it accretive or not accretive? If it is not accretive, I will be worried, and we will not do it. But if it is accretive, I think all our shareholders will support it, and we will do it. Because I think it is really important that any of the strategies which are accretive to deleverage, the biggest concern, like number one concern, our share price has been quite low compared to what was happening in Thailand.
In spite of us showing earnings every year on a higher basis. But now, with the markets coming back and our share price moving up, the next thing is our deleverage. It is important for us to deleverage and really show control of our cash flow. Once that is done, I think you will have the overhang lifted, which would be helpful, which will make me and most of our shareholders or all of our shareholders happy.
Thank you.
Thank you, Khun Dillip. Can I ask a couple of questions? On that note, my first question is, we see the guidance for leverage coming down, but it's a consequence of the REIT and the food IPO happening. What would be the leverage target if those two things don't happen? Then we can start there first.
Okay. The first thing is our leverage target on a D/E basis is to bring it down to about 0.75x, excluding Perps. Including Perps, today it's about 1.7x something. We want to bring that to 1.4x, so that's our target. So 0.75x, 1.4x, and D/E below. Debt to EBITDA below 4x.
Even if these two things don't happen, will you still be able to get there? Will you find a way to?
These numbers are. That's a good question. Actually, these numbers are based on the REIT IPO. We haven't factored in the food thing because there are quite a few unknowns in terms of that. Which is progressing. It doesn't mean we've stopped, so we're looking at both at the same time. But I think the REIT will happen for sure in the second half of the year, which will then bring down our D/E, our D/E including Perps, and also debt to EBITDA to about 4x or slightly below 4x.
As per your comment earlier that majority of the REIT proceeds are going to be used to repay down the debt, right? Is it fair to assume that if the REIT doesn't happen, then the leverage level will probably stay constant?
Yes.
That's the case, right? Okay.
That's not-
Understand. The second question following that is that, if both of these things happen, your leverage comes down to 1.3 x- 1.4 x on a net debt to equity basis. That is your comfort level, right? That is the level we have always heard Minor talk about over the past 10 years.
Yes.
What is next after that? Are we looking at more asset-heavy expansion after that again? Or are we looking-
No. We will continue to expand on asset- light. Our internal, the banking covenants was 1.7x, net debt to equity. Our internal target has always been 1.4x. We will get it down to 1.4x, and once we get it down to 1.4x, we will then continue the growth, mostly through asset- light. The asset-heavy ones will be the real estate developments, which will have a two-year cycle or a three-year cycle where it will mature, and then you will get the cash out. This year, I think, by Q4, we will get a pretty good cash out from Kiara, the residential project which we have in Phuket, the phase three. We now started phase four. Cash is going in. We are not stopping because we know the returns are good. The IRRs are like you are getting a 30% IRR, you will not get anywhere.
We will continue to take benefit of that. The growth strategy will continue, but focusing more on asset- light in the coming years, and keeping to our internal discipline of 1.4x or below.
Okay. Can I just rephrase and get a sense this way then? If we have a look at your managed hotel revenue last year, it was flat year-on-year?
Yes.
I can understand some closure and some new, but each year that we see 50 hotels- 100 hotels expected signing, how much of a revenue growth momentum on that can we expect to see?
I think we show the managed hotel, how much we are getting. If you look at the slide here, you can see how many hotels we are going to get through managed. You can see the slice actually increases, which means the revenue coming through the managed hotels will also. It is mainly fees, fee income. Do not forget, the fee income is not as high sometimes as your equity income, right? Because say, for example, in the Maldives, we own Kihavah, we make about $15 million-$20 million EBITDA. Net profit is about $10 million. That is $10 million to us. But if we have to manage hotels, maybe the fee income is $300,000- $400,000 per managed hotel. So you have to really build up that momentum to really move the needle up quite fast.
Okay, sorry if I am repetitive. I just want to get a sense, from 600 hotels- 850 hotels, how much EBITDA growth we can generate from this. How many percent of a portion of the growth that will come from going asset- light, essentially, right? That is what I am trying to get at.
Okay. I think if you look at the growth of going from 600- 850, 80% of that will come through managed or asset- light, 80% of the hotels. 20% will be leases and some investment. That 80% will contribute. You have to then work it backwards. If we assume that our net earnings will grow every year by 15%-20%, say it is going to grow by 15%. You say that net earnings will grow by 15% every year, out of which the contribution on the incremental net earnings, 80% will come through asset- light.
The last question from me is on CapEx. We see your CapEx going from THB 10 billion- THB 15 billion. Three of the THB 10 billion last year was from MHEA listing, right? Effectively, your CapEx is doubling this year. My question is, if a big portion of hotels were under renovation in 2025 already, what are these assets that needs uplifting and upgrades? What are the impacts on the performance of the hotel side if so many assets are going to go under renovation?
If you look at the CapEx allocation, 4% is hotel expansion. Restaurant upgrades are about 5%. The biggest chunk is coming from hotel maintenance upgrades, which is 65%. In a way, these are normal CapEx. It has two elements. One is the normal CapEx, which happens every year for the hotels, the usual upkeep of the assets. The second one is ROI-driven CapEx. Here, there will be more into ROI-driven CapEx. Say for example, the bigger projects we have will be on the residential side, the next phase four, five and six. We are also looking at some other residential development. We are looking at renovating our JW Marriott Phuket Resort & Spa. We are looking at renovating our The St. Regis here in Bangkok. These are big CapEx ticket items which will come, but it is driven by ROI.
Thank you.
Hi. Thanks so much, Khun Dillip. I have a follow-up question regarding the deleveraging target. I understand that by the end of this year, those targets would be largely driven by the REIT IPO. Just also would like to understand, beyond that, what would be the free cash flow capacity for debt reduction from Minor organically beyond that REIT? Are we looking at potential upside on deleveraging that would coming from organic excess free cash flow as well? Or that upside would be mainly depend on further asset monetization from Minor Food IPO or more asset recycling into REIT down the road?
The slide here is based on the deleveraging on the allocation where we do based on our earnings growth, which is going to happen, which will also bring in cash flow. Based on the REIT, assuming the REIT will conclude in the second half of the year, and that will go to reduce our debt. Based on those, and taking into account the CapEx, which we will have to spend, and the dividends which we will have to pay, and any of the bank loans or the Perps which we will materialize as well. Based on that, our debt to equity, as I said, will come down to in the range of 0.75x- 0.85x. This is based on a as-is basis, not adding some of the other initiatives.
Let's say beyond 2026, given the capacity when it comes to free cash flow, excess free cash flow, what would be the level of reduction that we can expect beyond 2026 without other asset monetization vehicles?
What would be the reduction of debt, you mean?
Yeah. Organically going forward beyond 2026?
Yeah. What we want to do is to maintain our D/E at the level of 1.3x going forward. Any cash, then a higher dividend payout, the cash generation, because of course, our earnings will start to keep going up. Last year was THB 9.99 billion. This year is going to be about THB 10 billion+ . That will also help as well.
Right. Okay. Would it be fair to assume that by the end of this year, Minor should be at the optimum, when it comes to capital structure in your view already?
Yes.
Okay. Got it. On the REIT, just a bit more. Now that assuming it comes through in the second half of this year, now you would also have REIT as a perpetual asset recycling vehicle for Minor. Any rough target in terms of future asset monetization into REIT per year going forward? Or because you still have over 300 hotels that you own still. Would that be part of how you accelerate the asset- light component of your hotel asset portfolio? Would REIT comes into that picture as well for future recycling?
Okay. That is a good question. I think with the whole purpose of the REIT gives us the best value for Minor from an IRR perspective. Moving forward, when there are investments or when there are acquisitions where Minor might not be able to do it because we want to maintain our 1.3x D/E ratio, we could always do it through the REIT vehicle. That is our thought process, which will then help us to really start to leverage our asset- light. Do not forget, again, on the REIT, we own 49%. Again, there will be some monies going into that as well. It will create that pipeline, which will continue to move upwards. Yes, I think if we do see assets, because, you are right, we are quite asset rich in our balance sheet.
If we see some of the asset monetization where we have reached the peak, then we might recycle that into a REIT.
Got it. With that in mind, there is no target as of yet?
There is no.
Okay. Got it. Thank you.
Any more questions? You can still send your question afterwards to me or to IR team. We will address all of your pending questions. Thanks a lot for your participation today. There is no more question on the ground here right now. We are going to close the meeting. If you have anything else, please send us questions, and we will try to address every one of them. Thank you for your participation today.
Yeah. Thank you very much.