CDL hotel trust's payout dips 3% on rights issue effects

CDL Hospitality Trusts' net property income rose 15.9 per cent to $40.4 million, driven by contributions from The Lowry Hotel in Manchester, Britain, and Pullman Hotel Munich in Germany.
CDL Hospitality Trusts' net property income rose 15.9 per cent to $40.4 million, driven by contributions from The Lowry Hotel in Manchester, Britain, and Pullman Hotel Munich in Germany.PHOTO: CDL HOSPITALITY TRUSTS

It would otherwise have increased 12.3%; total Q3 distribution up 13.3% to $27.4m

The effects of a rights issue hit the third-quarter payout at CDL Hospitality Trusts (CDLHT), it reported yesterday.

Distribution per stapled security (DPS) for the three months to Sept 30 came in at 2.29 cents, down 3 per cent from the 2.36 cents in the same period a year earlier. The dip was due mainly to the effects of a rights issue. If this was excluded, DPS would have increased 12.3 per cent.

Likewise, total distribution in the three months to Sept 30 was 13.3 per cent higher than a year earlier at $27.4 million.

Net property income (NPI) rose 15.9 per cent to $40.4 million, driven by contributions from The Lowry Hotel in Manchester, Britain, which was acquired in May, and Pullman Hotel Munich in Germany, acquired in July.

A 56 per cent jump in NPI from Grand Millennium Auckland in New Zealand, as well as stable contributions from the Singapore hotels and the Claymore Connect mall, also lifted total NPI.

But this was partly offset by weaker takings from the Japanese hotels and Maldives resorts, as well as a lower contribution from Hilton Cambridge City Centre, which was further affected by the weakened British pound.

Mr Vincent Yeo, chief executive of CDLHT's managers, said: "Our core market, Singapore, has shown incremental contribution this quarter despite the competitive trading conditions."

  • AT A GLANCE

  • GROSS REVENUE: $54.8 million (+20.7%)

    NET PROPERTY INCOME: $40.4 million (+15.9%)

    DISTRIBUTION PER STAPLED SECURITY: 2.29 cents (-3%)

The Singapore hotels comprise Orchard Hotel, Grand Copthorne Waterfront Hotel, M Hotel, Copthorne King's Hotel, Novotel Singapore Clarke Quay and Studio M Hotel. Claymore Connect is a mall adjoining Orchard Hotel.

NPI from the Singapore properties rose 2.3 per cent in the third quarter from a year earlier.

The average occupancy rate at the six Singapore hotels in the third quarter was 88.7 per cent, down from 90.7 per cent a year earlier. The average daily rate was $187, up from $186 a year earlier.

Revenue per available room was $166, down 1.4 per cent from $168.

CDLHT said the Hua Ting Chinese gourmet restaurant in Orchard Hotel is undergoing renovation and is expected to reopen by December. Refurbishment works are being planned for the guest rooms in one wing of the hotel in mid-December and are expected to be completed by next April.

Earnings per stapled security was 2.22 cents, up from a restated 2.20 cents in the third quarter last year. Net asset value per stapled security was $1.47 as of Sept 30, down from $1.55 as of Dec 31 last year.

Nomura analysts said in a note: "Overall, we expect the initial market reaction to be neutral - it appears that the hospitality market in Singapore could be close to bottoming out, but investors are waiting for the inflection point."

The counter closed down two cents, or 1.21 per cent, to $1.63 yesterday after results were released.

A version of this article appeared in the print edition of The Straits Times on October 28, 2017, with the headline 'CDL hotel trust's payout dips 3% on rights issue effects'. Print Edition | Subscribe