Frasers Hospitality Trust (FHT) ACV has reported a distribution per stapled security (DPS) of 1.2649 cents for the 1HFY2023 ended March 31, 79.9% higher than the DPS of 0.7039 cents in the same period the year before.
The higher DPS comes on the back of an improved performance in FHT’s 1HFY2023 following a further recovery in travel and demand in FHT’s operating markets. The trust saw a continued increase in demand and performance in some markets after the successful transition to living with Covid-19 as an endemic in many countries with the early recovery led mainly by leisure demand. The gradual resumption of corporate demand and marquee events in various cities also led to the better performance.
During the 1HFY2023, gross revenue increased by 41.1% y-o-y to $62.2 million while net property income (NPI) grew by 42.9% y-o-y to $45.2 million.
The higher gross revenue and NPI were attributable to the recovery in travel and demand. Excluding the contribution from Sofitel Sydney Wentworth which was divested in April 2022, same-store gross revenue and NPI grew by 68.1% and 77.3% y-o-y respectively.
FHT’s gross revenue and NPI for the half-year period reached 92.0% and 91.7% of their pre-Covid-19 levels respectively.
As a result of the higher gross revenue and NPI, income available for distribution increased by 79.9% y-o-y to $27.1 million.
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In Singapore, FHT’s average daily rate (ADR) grew by 83.1% y-o-y to $369 for the half-year period while its occupancy rate rose by 8.2 percentage points y-o-y to 76.3%. Revenue per available room (RevPAR) rose by 105.8% y-o-y to $282. The improvements were mainly supported by InterContinental Singapore’s transient business and Fraser Suites’ long-stay business. The portfolio’s gross operating revenue and gross operating profit more than doubled y-o-y to $50.6 million and $21.8 million respectively.
FHT’s Australian portfolio saw ADR grow by 42.4% y-o-y to A$276 ($244.38) while its occupancy rate rose by 48.3 percentage points y-o-y to 78.5% with increases in international tourist arrivals to the country. RevPAR more than tripled y-o-y to A$217. The portfolio’s gross operating revenue and gross operating profit increased by 1.6% and 5.4% y-o-y to A$22.4 million and A$11.1 million respectively.
FHT’s UK portfolio saw ADR increase by 17.6% y-o-y to GBP140 ($233.50) while its occupancy rate rose by 17.2 percentage points y-o-y to 77.8% as the UK lifted its Covid-19 restrictions since February 2022 as well as the remaining international travel restrictions in March 2022. RevPAR grew by 50.8% y-o-y to GBP109. UK’s gross operating revenue and gross operating profit rose by 51.3% and 67.0% y-o-y to GBP13.2 million and GBP5.5 million respectively.
FHT’s Japan portfolio, which only has ANA Crowne Plaza Kobe, saw improvements from domestic and international demand after the country’s reopened borders. In the 1HFY2023, the country’s portfolio saw ADR increase by 22.5% y-o-y to 13,872 Japanese yen ($138.11) while occupancy rose by 16.4 percentage points y-o-y to 57.9%. RevPAR rose by 71.7% y-o-y to 8,037 yen. Japan’s gross operating revenue and gross operating profit rose by 35.9% and 16.1% y-o-y to 1.82 billion yen and 438.5 million yen respectively.
FHT’s Malaysian portfolio, which only comprises The Westin Kuala Lumpur, FHT’s ADR rose by 32.3% y-o-y to 489 ringgit ($146.37). Occupancy increased by 48.4 percentage points y-o-y to 77.7% while RevPAR more than tripled y-o-y to 380 ringgit. Malaysia’s gross operating revenue more than doubled to 44.8 million ringgit while its gross operating profit reversed from losses to 14.6 million ringgit in the 1HFY2023.
In Germany, the Maritim Hotel Dresden “showed further signs of recovery”, according to FHT, although no further figures were reported. Its gross operating revenue rose by 97.1% y-o-y to EUR5.7 million ($8.4 million) while its gross operating profit more than doubled to EUR2.0 million.
As at March 31, FHT’s gearing stood at 35.0% with an interest cover of 3.4x. The proportion of its fixed-rate borrowings stood at 75.1%.
Its net asset value (NAV) per stapled security stood at 64 cents as at March 31, unchanged from its levels as at Dec 31, 2022.
Cash and cash equivalents stood at $83.0 million as at March 31.
In its outlook statement, the trust is “staying cautiously optimistic” in the year ahead as factors such as the ongoing conflict between Ukraine and Russia, higher oil and gas prices from the increased demand on China’s reopening as well as a potential recession may mitigate positives such as the slowdown in headline inflation, plateauing interest rates, strong travel demand and China’s reopening.
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“While macroeconomic challenges continue to dampen the outlook, we are heartened to record further recovery in the FHT portfolio’s performance which has further lifted the DPS in 1HFY2023. We remain cautiously optimistic on the continued recovery in the tourism and hospitality industry in the mid to long term and will navigate carefully through the challenges ahead,” says Eric Gan, CEO of the manager.
Unitholders will receive their distributions on June 28.
As at 9.14am, units in FHT are trading 0.5 cents higher or 1.05% up at 48 cents.
