CDL Hospitality Trusts Q4 DPSS declines 3.8% to 3.01 cents

SINGAPORE - CDL Hospitality Trusts (CDLHT) posted on Thursday (Jan 28) a 3.8 per cent decline in its distribution per stapled security (DPSS) to 3.01 Singapore cents for the fourth quarter ended Dec 31, from 3.13 cents for the year-ago period ago.

The group's net property income (NPI) for the quarter dipped 2.2 per cent to S$37.81 million from S$38.65 million previously.

The group comprises CDL Hospitality Real Estate Investment Trust (H-Reit), a real estate investment trust, and CDL Hospitality Business Trust (HBT), a business trust.

Contributions from Maldives Resorts and Singapore Hotels declined due to soft trading environment while Australia and New Zealand Hotels recorded lower fixed rents due to local currency weakness against the Singapore dollar.

The decline in NPI was mitigated by the inorganic contributions from Hilton Cambridge City Centre and Japan Hotels which were acquired on Oct 1 and Dec 19 respectively.

Net finance costs for the quarter increased by S$3.9 million to S$7.2 million mainly due to higher interest expenses and exchange losses from the revaluation of its Australia dollar and New Zealand dollar denominated receivables and cash equivalent balances. The higher interest expense arose due to additional loans taken for acquisitions as well as higher overall funding costs.

Total distribution for the quarter, after deducting working capital, fell 3 per cent to S$29.8 million. This includes the annual variable rent of Angsana Velavaru and nine-month income and capital distribution from the Japan Hotels.

For full year 2015, CDLHT registered NPI of S$137.0 million, S$3.5 million or 2.5 per cent lower than a year ago. The decline was mainly due to headwinds in the Singapore and Maldives hospitality sectors while Australia and New Zealand Hotels recorded lower fixed rents due to local currency weakness against the Singdollar.

Revenue per available room for its Singapore hotels fell by 6.9 per cent to S$175 in 2015 compared to a year ago mainly due to the subdued corporate travel demand amidst a slower global economic environment. Occupancy at M Hotel and Grand Copthorne Waterfront Hotel were also affected due to refurbishment works.

DPSS for the full year amounted to 10.06 Singapore cents, down 8.4 per cent from 10.98 cents in 2014.

Said Mr Vincent Yeo, CEO of CDLHT's managers: "Widespread economic slowdown has resulted in weaker trading conditions in some of our markets. Nevertheless, the strong performance from our Japan Hotels as well as our Cambridge hotel acquisition that was completed in October last year helped to provide the benefits of income diversification while other markets in our portfolio are going through unfavourable cycles. For 2016, we continue to maintain a cautious outlook for our portfolio hotels as a result of the macro uncertainty."