Frasers Hospitality Trust (FHT) has posted a distribution per stapled security (DPS) of 0.179 cents for the 1HFY2021 ended March, representing a 45.5% drop y-o-y.
Gross revenue dropped 36.2% y-o-y to $39.9 million, as the business continues to be impacted by the Covid-19 situation. Consequently, net property income (NPI) fell 40.9% y-o-y to $26.7 million.
Distributable income fell 72.7% y-o-y from $31.6 million to $8.6 million for the period due to the lower NPI and the payment of management fees in cash.
In addition, the manager of FHT has opted to retain $5.2 million or 60% of distributable income to conserve cash, given the ongoing uncertainties pertaining to the pandemic, which further contributed to the lower DPS.
The manager also notes that despite the y-o-y decline, gross revenue and NPI showed h-o-h improvement, driven by better performance of its Australian properties. Gross revenue and NPI were up 53.8% and 83.5% respectively h-o-h.
In terms of its portfolio contributions by country, all of FHT’s key markets reported y-o-y declines in gross operating profit for the 1HFY2021 including Australia (-46.8%), Singapore (-44.6%), and Japan (-83.5%). It’s UK and Malaysia markets reported gross operating losses of GBP0.2 million ($0.35 million) and RM8.7 million ($2.8 million) respectively.
For its Australia properties, despite the better h-o-h performance, driven by government bookings for isolation facilities and grants, RevPAR declined steeply by 70.2% compared to the previous year when the impact of the pandemic was only felt in March 2020.
SEE:Frasers Hospitality Trust records lower RevPAR across all portfolios in 1Q21 business update, says it remains 'confident' in long-term fundamentals of the market
For its Singapore properties, RevPAR was 42.9% lower y-o-y due to lower average daily rate (ADR) and occupancy but was 8.7% higher h-o-h due to improved ADR as InterContinental Singapore ceased being a stay-home notice facility in September 2020.
For Japan, FHT’s property continues to be impacted by the state of emergencies in a number of Japanese cities. RevPAR decreased 53.6% y-o-y, though it showed a 68.4% h-o-h improvement on the back of higher occupancy and ADR.
The DPS is expected to be paid out by Jun 29.
Looking ahead, the manager cites a rather bleak outlook, noting that “ the overall prospects for a rebound in 2021 seem to have worsened”. However, FHT “continues to have sufficient liquidity to ride through these extraordinary times” and will position itself for the eventual recovery as vaccination programmes continue to be rolled out.
“In view of the substantial pent-up demand for leisure travel and the expectation that domestic tourism will recover faster than international tourism, we think that countries such as Australia, Japan and the UK where we have presence in are probably best positioned for earlier recovery, given their predominant domestic travel markets,” says Eu Chin Fen, CEO of the manager.
Units in FHT fell 1 cent or 1.74% to 56.5 cents on April 29.
