SINGAPORE (April 28): The managers of Frasers Hospitality Trust (FHT) have posted a distribution per stapled security (DPS) of 1.2063 cents, down 9.1% on-year from 1.3274 cents in 2Q16 due to the enlarged stapled security base post-rights issue.
Gross revenue for the quarter grew 43.1% to $38.7 million from $27 million a year ago, boosted by the addition of Novotel Melbourne on Collins and Maritim Hotel Dresden as well as better performance of Sydney, UK and Malaysia properties.
These were partially offset by the soft performance of Singapore and Japan properties.
Distribution income was $22.3 million, up 21.4% from $18.4 million in 2Q16.
While net property income (NPI) grew 29.9% to $28.9 million from $22.2 million in the previous year, NPI margin declined 7.5 percentage points to 74.7%, as it was averaged down by the lower margin of Novotel Melbourne on Collins.
As the Melbourne hotel is not master leased, its NPI margin is computed after taking into account the hotel’s operating costs which are borne by the master lessees in the other properties, say the managers.
Over the quarter, FHT’s Australia portfolio recorded a 46.1% and 70.6% increase in gross operating revenue (GOR) and gross operating profit (GOP) respectively, boosted by the addition of Novotel Melbourne on Collins. Revenue per available room (RevPAR) for the portfolio increased 4.1% on-year, with RevPAR for Sydney and Melbourne increasing by 11.3% and 4.7% respectively.
The Singapore portfolio reported GOR growth of 1.6% in 2Q17 due to higher occupancy levels recorded at InterContinental Singapore following completion of the renovation in 2Q16. However, it registered a decline in GOP due to higher costs incurred by Fraser Suites Singapore due to continued weakness in corporate demand from the oil and gas and banking industries.
“Our strategy to diversify our earnings base has continued to serve us well… Going forward, we remain focused on pursuing growth opportunities through asset enhancement initiatives and value creating acquisitions by leveraging on the strength of our balance sheet,” comments Eu Chin Fen, CEO of the managers.
Units of FHT closed 0.7% lower at 73 cents on Thursday.
