U City Public Company Limited (U City) completed a remarkable turnaround to record a net profit of THB 92mn in 2021, versus a net loss of THB (6,614)mn in 2020. This notable swing in financial performance is attributable to the rapid change in direction that the Company's Board of Directors and Shareholders approved earlier last year.
Only 12 months ago, U City was a faltering company caught in the bullseye of the COVID pandemic. Reliant almost entirely on the hospitality business, it saw its revenues decimated by 90% from its peak, and closed almost all of its 73 hotels due to Government restrictions and eradicated travel demand. Further, the path to recovery was uncertain, with subsequent COVID strains and uncertain Government policy-making planning almost impossible.
But following shareholder decisions to sell off its Hospitality and other real estate business, and to shore up its balance sheet with a capital increase, U City has swiftly seen its financial performance move into the green.
On 15 December 2021, U City signed an agreement to further dispose of its European hotel assets. To date, it has entered into agreements to sell approximately THB 6.3bn worth of real estate assets. Over the next 3 years, U City will dispose of its remaining THB 26bn of real estate portfolio.
In parallel, it has accelerated its move into financial services through the acquisition of Advance Life Assurance Public Company Limited ("A LIFE") as well as significant stakes in Singer Thailand Public Company Limited ("SINGER") and Jay Mart Public Company Limited ("JMART"), as it moves to integrate financial services to the heart of BTS Group's "3M" Strategy.
"The Company's turnaround has been well executed so far, and we are delighted with the impact to our financial results. We expect to see more transactions that will accelerate our expansion into financial services within this year," said Ms. Soraya Satiangoset, CFO and Acting CEO of U City.
In 2021, U City recorded revenue of THB 6,572mn, increasing by 16.3% YoY and helped by a gain from the investment in JMART. Since U City decided to invest in JMART and SINGER, their shares have increased by 64% and 32% respectively, enabling U City to capture the value of major shareholder BTS Group's MATCH strategy.
U-P, the preference shares in U City which have a preferred right to receive dividends from the Company traded at THB 1.06 per share as of 14 February 2022.