CDL Hospitality Trusts first-half DPS falls 63.7% on Covid-19 disruptions

SINGAPORE (THE BUSINESS TIMES) - CDL Hospitality Trusts' (CDLHT) distribution per stapled security (DPS) sank 63.7 per cent to 1.51 cents for the six months ended June 30, 2020 from 4.16 cents a year ago.

Gross revenue was down 44.5 per cent to $52.1 million for the half year, from $93.8 million a year ago.

The stapled group's managers said in a regulatory filing on Wednesday (July 29) that most of its properties - with the exception of its New Zealand and Singapore hotels - were either closed on a temporary basis, or operating at low occupancies from March onwards due to strict travel restrictions and social distancing measures as a result of the Covid-19 pandemic.

Occupancies for the New Zealand and Singapore hotels were bolstered by demand for accommodation facilities for isolation purposes, while occupancy for the Singapore hotels was also supported by demand from foreign workers affected by border closures.

The managers added that a "substantive" $32.1 million contribution to portfolio rental income from its Singapore, New Zealand and Australia hotels had partially insulated CDLHT from the "severe effects of the pandemic".

Net property income (NPI) fell 56 per cent on the year to $29.7 million for the half year, from $67.5 million.

Distributable income declined 63.6 per cent year on year to $18.4 million, from $50.4 million.

The distribution will be paid out on Aug 27, after books closure on Aug 7.

Chief executive of CDLHT's managers Vincent Yeo said the managers were "preparing ourselves for an eventual recovery in global tourism, and keeping faith with the long-term growth prospects of our markets even though there is significant short-term uncertainty."

He added that CDLHT had utilised periods of low occupancy to carry out "critical" guest-related asset enhancement works, and fortified its financial position by conserving cash and securing a new $100 million credit facility in June.

In July, CDLHT sold Novotel Singapore Clarke Quay and acquired W Singapore Sentosa Cove. The two deals augmented its balance sheet with a net cash inflow of $26.8 million, the managers said.

CDLHT comprises CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust.

Stapled securities of CDLHT ended Tuesday at 98.5 cents, down 0.5 cent or 0.5 per cent.

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