OUE Hospitality Trust (OUE H-Trust) reported a sharp drop in its second-quarter distribution per stapled security (DPS) on lower income from its hotel and retail properties.
DPS for the three months to June 30 was 0.92 cent, down by 39.5 per cent from a year ago. Excluding the rights issue earlier this year, the DPS in the second quarter would have been 1.23 cents, the trust said yesterday.
Income available for distribution slipped 18 per cent to $16.56 million, owing to lower contributions from both its hospitality and retail segments, and higher finance expenses.
Net property income came in at $23.16 million, down by 10.2 per cent from a year earlier, while revenue fell 9.2 per cent to $26.87 million, compared with $29.6 million in the previous year.
OUE H-Trust is a stapled group comprising OUE Hospitality Real Estate Investment Trust and OUE Hospitality Business Trust.
AT A GLANCE
GROSS REVENUE: $26.9 million (-9.2 %)
NET PROPERTY INCOME: $23.2 million (-10.2%)
DISTRIBUTION PER STAPLED SECURITY: 0.92 cent (-39.5%)
Its portfolio consists of the Mandarin Orchard Singapore and Crowne Plaza Changi Airport hotels and the Mandarin Gallery mall.
Hospitality revenue in the second quarter was $1.3 million lower than in the previous year, partly due to reduced rates at Crowne Plaza Changi Airport and weaker corporate travel.
Second-quarter turnover for its retail segment was down by $1.4 million from the year before, owing to lower average occupancy and landlord fit-out periods for incoming tenants.
OUE H-Trust posted a 4 per cent drop in net property income to $49.45 million for the first half while revenue came in at $57.02 million - 3.3 per cent lower than the year before.
"Third and fourth quarter will be better because we will have additional revenue and income from the Crowne Plaza Changi Airport Extension, as well as rental income when Michael Kors and Victoria's Secret open," Mr Chong Kee Hiong, chief executive of OUE Hospitality Reit Management, told a briefing.
Apart from its earnings, the trust also announced that it had completed the acquisition of Crowne Plaza Changi Airport Extension, which started operations on yesterday.
The counter closed two cents lower at 71 cents yesterday, before the earnings were announced.