SINGAPORE (July 30): The manager of Ascott Residence Trust’s (Ascott REIT) has announced 2Q19 distribution per unit (DPU) 1.98 cents, up 8% from a year ago.
Ascott Residence Trust Management Limited (ARTML) says unitholders’ distribution for the quarter also increased 8% to $43.1 million. This included a realised exchange gain of $3.1 million arising from the repayment of foreign currency bank loans with the divestment proceeds from Ascott Raffles Place Singapore.
Revenue for 2Q19 increased 2% to $132.5 million. This was mainly due to additional revenue from the acquisition of Citadines Connect Sydney Airport in May and higher revenue from the existing properties in the Philippines, the United Kingdom and Japan.
Gross profit for 2Q19 climbed 7% from 2Q18 to $67.6 million due to higher revenue and adoption of accounting standard FRS 116 Leases which took effect from Jan 1 which affected expenses for Ascott REIT’s portfolio of operating leases.
In 2Q19, gross profit for the Philippines rose 36% due to higher revenue from the refurbished apartments at Ascott Makati and lower operating costs. Both Spain and Belgium enjoyed stronger leisure demand, with gross profit increasing 29%6 and 22%6 respectively. Gross profit for the United Kingdom grew 12% due to higher demand from corporate and leisure travellers. Gross profit for Vietnam increased 7% mainly due to stronger demand from project groups and higher commercial rent.
In 2Q19, Asia Pacific contributed 49% to gross profit while 51% came from Europe and the United States. Approximately 40% of the gross profit for 2Q19 was contributed by stable income from properties on master leases and properties on management contracts with minimum guaranteed income, while the remaining was from properties on management contracts.
Bob Tan, ARTML chairman, says, “With our recent proposed combination of Ascott Reit and Ascendas Hospitality Trust (A-HTRUST), we expect higher stable income for the combined entity at 46% of gross profit. Ascott REIT’s DPU is expected to grow 2.5% on a FY18 pro forma basis through the combination. With a debt headroom of about $1 billion for the combined entity, we will have the financial capacity to pursue more accretive acquisitions and undertake development or conversion projects to enhance portfolio value. We will look at opportunities from both our sponsor The Ascott Limited and third parties.”
Units in Ascott REIT closed at $1.30 on Monday.
