SINGAPORE (Aug 1): Ascendas Hospitality Trust (AHT) reported distribution per stapled security (DPS) of 1.28 cents for the 1Q19 ended June, down 5.2% from DPS of 1.35 cents a year ago.
Distributable income fell 4.8% to $14.6 million in 1Q19, compared to $15.3 million in 1Q18/19.
This was mainly due to the absence of partial distribution of proceeds of $1.8 million in 1Q18/19 from the divestment of Novotel Beijing Sanyuan and ibis Beijing Sanyuan.
Excluding the proceeds from divestment, DPS for 1Q18/19 would be 1.20 cents, and the DPS for 1Q19 would have increased by 6.7% y-o-y.
1Q19 gross revenue fell 3.6% to $46.5 million, from $48.2 million a year ago.
The lower revenue was due to the master lease arrangements for the new hotels in Korea and Japan, while the China portfolio in the prior period was under management contracts.
Excluding contribution from the China portfolio, which was divested in May 2018, 1Q19 gross revenue would have increased by 3.5% y-o-y.
Property expenses fell 3.7% to $25.3 million in 1Q19, from $26.2 million a year ago.
Consequently, net property income (NPI) was 5.2% higher at $21.3 million in 1Q19, on the back of full quarter contributions from the new hotels.
Excluding contribution from the China portfolio, NPI would have increased by 13.7% y-o-y.
AHT currently has 14 hotels in its portfolio, with approximately 4,700 rooms in total across Australia, Japan, Korea, and Singapore.
As at end June, cash and cash equivalents stood at $47.9 million.
Overall gearing ratio remained at 34.1% as at June 30, 2019.
“We are pleased that the five hotels acquired in the previous financial year have contributed positively to the portfolio. The NPI contribution from these hotels have made up for both the loss of income from the sale of the two hotels in Beijing as well as lower contribution from Australia portfolio, which was impacted by a weaker AUD against SGD,” says Tan Juay Hiang, chief executive officer of the managers.
“We believe that the rebalancing of the portfolio through the acquisitions has improved the quality of the portfolio and also strengthened its resilience through added income stability,” he adds.
AHT notes that demand for hotel accommodation in Sydney is expected to remain robust despite the potential downward pressure on room rates. “We remain positive on the longer term prospects of the Australia market in general,” Tan says.
Tokyo and Osaka are also expected to benefit from the Rugby World Cup, while the growth in Singapore’s international arrival figures should bode well for the future.
Earlier this month, Ascott Residence Trust (ART) and AHT, both members of the CapitaLand group after its acquisition of Ascendas-Singbridge, had proposed a deal which will result in the combination of both entities into one.
The combined entity will become the largest hospitality trust in Asia Pacific and the 8th largest globally, with an asset value of $7.6 billion.
It will also become the seventh largest trust listed on the Singapore Exchange by asset value.
See: Ascott Residence Trust and Ascendas Hospitality Trust combining to form $7.6 bil behemoth
Units in A-HTRUST closed 2 cents higher, or up 1.9%, at $1.06 on Thursday.
