OUE Hospitality Trust's Q2 DPS down 39.5%

OUE Hospitality Trust on Monday reported a 39.5 per cent drop in distribution per stapled security (DPS) to 0.92 Singapore cent for its second quarter ended June 30, 2016.

This compared to 1.52 cents that it paid out a year ago. The lower distributions were partly due to an enlarged unit base following a rights issue, but also partly due to poorer performance from its hotels and mall.

Revenue fell 9.2 per cent to S$26.9 million, while net property income fell 10.2 per cent to S$23.2 million for the quarter.

The trust's hospitality segment includes master lease income from its Mandarin Orchard Singapore hotel and Crowne Plaza Changi Airport hotel; this is pegged to a percentage of the operating revenue and profit of the respective hotels.

The trust said that global economic uncertainties resulting in dampened corporate travel affected the performance of the Mandarin Orchard Singapore hotel. Master lease income came in S$1.2 million lower than a year ago, with a revenue per available room (RevPAR) of S$200, versus S$218 in Q2 2015.

"The increase in rooms supply in Singapore has also created a highly competitive market environment for business from all segments. The decrease in room sales was partially mitigated by an increase in food and beverage sales due to higher patronage at the food and beverage outlets," it added.

Master lease income from the Crowne Plaza Changi Airport hotel was also slightly lower than a year ago, with a RevPAR of S$225, as compared to S$231 in Q2 2015 due to lower rates. Occupancy which continued to be close to 90 per cent, saw a slight increase.

As for the retail segment - referring to rental and other income from the Mandarin Gallery shopping mall - retail revenue for Q2 came in S$1.4 million lower than the previous year due to lower average occupancy rate at 79.1 per cent and landlord fit out periods for incoming tenants.

The mall recorded an effective rent per square foot per month of S$24.60 for Q2 as compared to S$24.20 a year ago.

Units of the trust fell 2.7 per cent to end at S$0.71 on Monday.