Frasers Hospitality Trust Q2 DPS falls 7.8% to 1.11 S cent

FRASERS Hospitality Trust (FHT) posted a 7.8 per cent year-on-year dip in distribution per stapled security to 1.1126 Singapore cents for the second quarter ended March 31, owing to weaker performance across its portfolio, save for its Japan and Singapore properties.

FHT is a stapled group comprising Frasers Hospitality Real Estate Investment Trust and Frasers Hospitality Business Trust.

In results announced on Thursday morning, FHT recorded a fall in net property income of 4 per cent to S$27.8 million, on the back of S$37.5 million in gross revenue, 3.1 per cent lower than for the same period a year ago.

The Australia portfolio turned in a weaker performance in Q2 due to the more competitive trading environment in Sydney and Novotel Sydney Darling Square's renovation, which was completed in end January 2018.

Meanwhile, weaker corporate demand contributed to softer performance of the trust's UK and Malaysia portfolios, and adverse weather conditions this winter affected leisure demand in the UK, said FHT.

Income available for distribution fell 6.5 per cent to S$20.9 million, as a result of lower net property income and higher finance costs arising from the refinancing of existing term loans with longer tenure bonds.

"This quarter, our Sydney properties face a more competitive landscape due to softer corporate demand. Post-renovation, Novotel Sydney Darling Square is expected to ramp up its performance in the next few months," said Eu Chin Fen, chief executive of FHT's managers.

"With our debt headroom and the strength of our balance sheet, we will continue to actively pursue acquisition opportunities to support our earnings growth and create value for our stapled securityholders," she added.

FHT has set the books closure date for May 7, 2018, with the distribution payment set for June 29.

The stapled security was trading at S$0.75 as at 2.43pm on Thursday.