SINGAPORE (Aug 2): The managers of Ascendas Hospitality Trust (A-HTRUST) reported distribution per stapled security (DPS) of 1.35 cents for the 1Q18/19 ended June, some 3.1% higher than DPS of 1.31 cents a year ago.
This was largely due to the partial distribution of the proceeds from the divestment of the two hotels in Beijing, as well as and lower net finance costs.
1Q18/19 gross revenue fell 9.8% to $48.2 million, from $53.5 million a year ago. This was mainly due to partial loss of income arising from the divestment, as well as lower contribution from the Australia portfolio.
Consequently, net property income (NPI) was down 9.3% to $20.2 million in 1Q18/19.
As at end June, cash and cash equivalents stood at $41.3 million.
“The proceeds from the divestment was substantially used to pare down bank borrowings and fund the acquisition [of The Splaisir Seoul Dongdaemun],” says Tan Juay Hiang, chief executive officer of the managers.
“The divestment also resulted in a significant increase in net asset value per stapled security to $1.01, and at the same time, lowered our gearing ratio to 23.7%, providing headroom for further acquisitions to support growth,” Tan adds.
The increase in NAV per stapled security was close to 10% compared to the previous quarter.
Looking ahead, the managers of A-HTRUST say market conditions are expected to remain competitive in Australia, while the performance of the hotel market in Singapore is expected to recover on the back of a tapering of supply of new hotel rooms.
“While some of our Australia hotels currently experience challenges, we continue to be confident in the long term prospects of Australia in general, given the sound fundamentals of its hospitality market,” says Tan.
According to Tan, the acquisition in Korea as well as the announced acquisition of the portfolio of hotels in Osaka, Japan are in line with the group’s strategy of investing in a stable and well-diversified portfolio.
“Further, through these acquisitions, we have also reconfigured the portfolio by improving income stability through master leases and further diversification into improving markets,” he adds.
Units of A-HTRUST closed half a cent higher at 81 cents on Thursday.
