Ascott Residence Trust warns of 60-70% fall in FY2020 DPS on pandemic impact

Ascott Residence Trust could see its portfolio value decline by 6-8 per cent.
Ascott Residence Trust could see its portfolio value decline by 6-8 per cent.PHOTO: BLOOMBERG

SINGAPORE (THE BUSINESS TIMES) - Ascott Residence Trust (ART) expects to cut distribution per stapled security (DPS) by between 60 per cent and 70 per cent in FY2020, the managers warned on Friday.

The projected fall in DPS, from the 7.61 Singapore cents paid out in FY2019, comes as distributable income could drop by 40-50 per cent year-on-year, taking into account realised exchange gains and partial distribution of divestment gains.

The profit guidance was based on the managers' preliminary review of its financial statements for the year to Dec 31, 2020, which are due to be released on Jan 27, 2021.

ART could see its portfolio value decline by 6-8 per cent and cause unrealised fair value losses of S$325-345 million, although these losses will not affect distributable income.

The managers for ART, which comprises Ascott Real Estate Investment Trust and Ascott Business Trust, had earlier warned that the trust's financial performance would suffer from the impact of the Covid-19 pandemic on the global hospitality industry.

Still, the managers said they "wish to emphasise that ART has a strong financial position with sufficient liquidity to meet its operating and financial commitments".

They added that they will make updates as needed when there are material developments, while stapled security holders and potential investors are advised to exercise caution when dealing or trading ART.

Units closed at S$1.13 on Friday, up by S$0.01 or 0.89 per cent, before the news.