CDL Hospitality Trusts (CDLHT) expects its first-half performance will be severely affected amid the downturn in global tourism and travel as a result of the Covid-19 pandemic.
Its managers said last Friday that distribution per stapled security after retention is expected to decline by 60 to 70 per cent in the six months to June 30 from the 4.16 cents paid out a year earlier.
Distributable income is expected to fall by the same proportion, from $50.4 million last year.
Preliminary estimates suggest the trust's total return after tax for the first half will record a marginal loss, versus the $30.6 million profit recorded last year.
It will book one-off winding-down costs from the divestment of Novotel Singapore Clarke Quay, which closed on July 15. Excluding the one-off expenses, the total return may register a slight profit in the first half, the managers said.
They will continue to value the assets at the end of the financial year, and any fair-value gains or losses will be noted in the full-year results.
However, they said there is uncertainty about the carrying amounts of the investment properties and fixed assets as of June 30, as these were based on independent valuations as of Dec 31 last year, and have not taken into account the pandemic's impact, which "may be significant".
International travel curbs largely remain in place, even though the trust's markets have seen strict Covid-19 measures progressively relaxed since the middle of this year.
Its overseas properties are closed temporarily or operating at low occupancies, except its New Zealand hotel, Grand Millennium Auckland.
Nonetheless, occupancies at the Singapore and New Zealand hotels continue to be supported by the demand for isolation accommodation.
Overall, revenue per available room across the portfolio has been and will continue to be significantly affected, the managers said.
"While sentiments point to a start of the recovery of travel in 2021... there is much uncertainty on the recovery trajectory. A viable medical solution is vital to the pace of the pick-up in international travel."
The managers noted that the trust has sufficient liquidity and there are no concerns over its ability to fulfil its near-term debt obligations and operational needs.
The stapled group also registered net cash inflow of $26.8 million from two completed deals this month - divesting Novotel Singapore Clarke Quay and acquiring W Singapore in Sentosa Cove.
The first-half results will be released before trading on July 29.
CDLHT closed down 2.94 per cent to 99 cents yesterday.
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