A-HTrust's DPS up 3.1% in Q1, lifted by divestment

But revenue and net property income fall due to reduced Aussie contributions, forex translations

Divesting two hotels in Beijing and lower net finance costs boosted the numbers at Ascendas Hospitality Trust (A-HTrust) in the first quarter.

Distribution per stapled security (DPS) for the three months to June 30 rose 3.1 per cent to 1.35 cents, it reported yesterday.

However, gross revenue and net property income (NPI) both slid on the back of reduced contributions from its portfolio in Australia, foreign exchange translations and from the partial loss of income due to the divestment.

In particular, the Australian dollar and the Japanese yen both depreciated against the Singapore dollar.

Gross revenue was down 9.8 per cent to $48.2 million, while NPI declined 9.3 per cent to $20.2 million. Income available for distribution was 3.8 per cent higher at $15.3 million.

The trust noted that the proceeds from the hotel divestment were used to pare bank borrowings and fund the acquisition of The Splaisir Seoul Dongdaemun hotel in South Korea in May.

The average occupancy of its hotels under management agreements dipped 1.2 percentage points to 82.1 per cent, while the average daily rate fell 2.9 per cent to A$165 (S$166).

  • AT A GLANCE

  • REVENUE: $48.2 million (-9.8%)

    NET PROPERTY INCOME: $20.2 million (-9.3%)

    DISTRIBUTION PER SECURITY: 1.35 cents (+3.1%)

Meanwhile, revenue per available room (RevPAR) was 3.5 per cent lower at A$136.

Its hotels in Sydney mostly contributed lower NPI due to weak market conditions, while its Melbourne hotel was affected by softer conferences and events demand in the city.

Hotel Sunroute Osaka Namba posted a year-on-year improvement following room renovations while The Splaisir Seoul Dongdaemun started contributing after the completion of the acquisition on May 21.

In Singapore, Park Hotel Clarke Quay contributed a higher NPI by 6 per cent, as the injection of new hotel rooms eases off.

Mr Tan Juay Hiang, chief executive of the manager, said: "We are pleased to be able to seek out accretive acquisitions in keeping up the growth momentum. The divestment... lowered our gearing ratio to 23.7 per cent, providing headroom for further acquisitions to support growth."

He added that while some of its Australian hotels are experiencing challenges, it continues to be confident about the long-term prospects of the hospitality market there.

A-HTrust is a stapled trust comprising Ascendas Hospitality Real Estate Investment Trust and Ascendas Hospitality Business Trust.

Its units closed up 0.5 cent at 81 cents yesterday.

A version of this article appeared in the print edition of The Straits Times on August 03, 2018, with the headline 'A-HTrust's DPS up 3.1% in Q1, lifted by divestment'. Print Edition | Subscribe