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Forex movements hurt Ascendas Hospitality Trust's income in Q1
ASCENDAS Hospitality Trust (A-HTrust) on Thursday reported a 3.2 per cent increase in first-quarter distribution per unit to 1.28 Singapore cents for the three months ended June 30, 2015.
This was despite a 2.7 per cent drop in gross revenue to S$52.8 million, while net property income dipped 0.9 per cent to S$21.4 million.
This was due to the continued weakening of the Australian dollar and the Japanese yen against the Singapore dollar, which impacted earnings in SGD despite the overall improvement in the performance of the portfolio, it said.
In fact, the performance of its Australia and Japan portfolios had shown strong growth in the local currencies, especially the Australia portfolio which posted net property income growth of 10 per cent year on year in A$ terms.
However, compared to the same quarter last year, the average exchange rates for A$ and the yen both weakened against SGD by about 10 per cent, which moderated its financial performance when converted to SGD, it said.
Income available for distribution still managed to increase because the cost incurred a year ago in relation to the unwinding of the A$/SGD cross-currency swap was absent this quarter.
Starting from this quarter, up to 5 per cent of income available for distribution will be retained for working capital purposes to help the trust cut its reliance on debt for funding of recurring capital expenditure requirements, it added.
A-HTrust's counter closed unchanged at S$0.68 on Thursday.
Its portfolio comprises 12 hotels across cities in Australia, China, Japan and Singapore, including Novotel Sydney Central, Novotel Beijing Sanyuan, Osaka Namba Washington Hotel Plaza and Park Hotel Clarke Quay.