The manager of Ascott Residence Trust (ART) has declared a distribution per stapled security (DPS) of 1.05 cents for 1H20, down 69% from 3.43 cents in 1H19.
Distributable income (DI) fell 56% y-o-y to $32.6 million. ART says it may grant further rent deferment or waivers to support its tenants through this “challenging period”.
To mitigate the impact on distributions, however, ART has included a $5.0 million top-up in the distribution for 1H20. The eventual distribution of the retained 15% will depend on the final income for distribution based on the results for the full year ending December.
Revenue for the period fell 16% to $208.5 million mainly due to the decrease in revenue from the divestment of Ascott Raffles Place Singapore and Somerset West Lake, as well as the lower revenue of $91.1 million from its existing portfolio.
The decrease in revenue is partially offset by the additional contribution of $55.4 million from the acquisition of the A-HTRUST portfolio, Quest Macquarie Park Sydney in February 2020, and Citadines Connect Sydney Airport in May 2019.
In 1H20, 21 of ART’s properties were closed due to lockdown measures by governments, or weak demand.
Revenue per available unit (REVPAU) for 1H20 fell 52% y-o-y to $70.
1H20 gross profit fell 28% y-o-y to $88.6 million due to lower revenue, and partially offset by lower operating costs from cost containment and government support measures.
On a same store basis, gross profit decreased by $54.8 million.
Finance costs in 1H20 rose 4% y-o-y to $27.3 million due to the acquisition of the A-HTRUST portfolio and Quest Macquarie Park in Sydney.
As at end June, cash and cash equivalents stood at $278.7million.
Distributions will be paid out on August 28.
“We expect recovery of the hospitality industry to be led by the domestic, leisure and free independent travel segments and ART’s properties are well-placed to cater to the needs of these first travellers. Together with our partners, ART’s immediate focus is to capture accommodation demand from these segments and continue to source for alternative business opportunities,” says Beh Siew Kim, CEO of the manager.
“Given the risk of resurgence of COVID-19, we expect the RevPAU of our properties to remain under pressure in the near term. Nonetheless, ART remains well capitalised with sufficient liquidity to navigate through the crisis,” she adds.
Units in ART closed flat at 92 cents on July 27.
See also: ART sets precedence with perpetual securities; other REITs could follow, Ascott Residence Trust anticipates 75% plunge in distribution per stapled security for 1H20 following 'extensive global travel restrictions', and Ascott Residence Trust divests properties in China and France for total of $191.4 mil
