CDL Hospitality Trusts first-half DPS falls 19.2% despite higher property income

W Singapore Sentosa Cove Hotel, one of the properties owned by CDL Hospitality Trust.
W Singapore Sentosa Cove Hotel, one of the properties owned by CDL Hospitality Trust.PHOTO: BT FILE

SINGAPORE (THE BUSINESS TIMES) - CDL Hospitality Trusts' (CDLHT) distribution per stapled security (DPS) fell 19.2 per cent to 1.22 cents for its first half ended June 30, from 1.51 cents a year ago.

The drop came on the back of post-rent restructuring, a low base effect from earlier losses and the absence of one-off contributions from a divestment in the first half of 2020.

This was despite CDLHT posting a 24.4 per cent higher year-on-year net property income (NPI) of $37 million, compared with $29.7 million for the year-ago period.

In a bourse filing on Friday morning (July 30), the managers said the lower DPS can be attributed to three reasons:

• An NPI increase of $5.4 million for UK hotels and Raffles Maldives Meradhoo that was "largely due to the low base effect" arising from losses in NPI recorded in the year-ago period, over and above expenses below NPI that needed to be accounted for;

•Post-rent restructuring for CDL's hotels in Germany and Italy as rent recorded was higher than the actual rent received, and after deducting interest, no distribution was left from the rent received; and

• Dissolution of the management corporation strata title relating to the divestment of Novotel Singapore Clarke Quay in the first half of last year that did not result in any one-off contributions to distributable income.

CDLHT's revenue per available room (RevPAR) for its six Singapore hotels declined year on year by 9.5 per cent to $72 from $79 in H1 2020, while overseas, the only countries that saw gains were Australia and New Zealand.

It also recorded nearly $15 million in distributable income, which it said it would distribute on Aug 27.

It posted a gross revenue of $66.2 million, and gearing of 39.1 per cent with debt headroom of $595 million, for the half-year period as well.

In comments published in the stapled group's filings with the Singapore exchange, chief executive officer of CDLHT's managers Vincent Yeo noted the mitigating effect of widespread vaccination efforts against Covid-19 in accelerating the ease of restrictions and the restart of international travel in Europe.

"The performance of our UK and Germany hotels has been encouraging, and we are experiencing some of the highest occupancies since the onset of Covid-19," he said. "We are optimistic that such form of recovery could follow in other markets upon the continued easing of restrictions and quarantine requirements.

"As we head towards travel normalcy, we will continue to work closely with our operators and lessees to ride on the recovery, while maintaining tight costs control measures to protect the bottom line," he added.

Earlier this week, it also announced it would be diversifying its portfolio to include rental housing, co-living, student accommodation and senior housing.

CDLHT is a stapled group comprising CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust.• Dissolution of the management corporation strata title relating to the divestment of Novotel Singapore Clarke Quay in the first half of last year that did not result in any one-off contributions to distributable income.

CDLHT said it would distribute the DPS of 1.22 cents per stapled security on Aug 27.

It posted a gross revenue of $66.2 million for the half-year period as well.

Earlier this week, it also announced it would be diversifying its portfolio to include rental housing, co-living, student accommodation and senior housing.

CDLHT is a stapled group comprising CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust.

The counter was down one cent, or 0.8 per cent, at $1.22 as at the midday break on Friday.