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ARA H-Trust Q4 DPS misses IPO forecast by 12.9% at 1.08 US cents

ARA US Hospitality Trust (ARA H-Trust) posted a distribution per stapled security (DPS) of 1.08 US cents for the fourth quarter ended Dec 31, 2019, missing its initial public offering (IPO) forecast of 1.24 US cents by 12.9 per cent.

Gross revenue was down 12.2 per cent to US$39.3 million for the quarter, from US$44.8 million forecast. 

This was due to room revenue being 12.6 per cent lower than forecast at US$37.2 million due to lower average daily rate. Meanwhile, occupancy was slightly lower at 69.8 per cent for the fourth quarter, the managers of the hospitality stapled group said on Wednesday.

Net property income (NPI) fell 32.9 per cent on the year to US$9.2 million for the quarter, from the forecast US$13.8 million.

Distributable income declined 12.9 per cent year on year to S$6.1 million, from S$7 million forecast.

The distribution will be paid out on March 27, after books closure on Feb 28.

Meanwhile, for May 9, 2019 - ARA H-Trust's listing date - to Dec 31, DPS was 7.7 per cent lower at 4.21 US cents, versus 4.56 US cents forecast, and distributable income fell 7.7 per cent to S$23.9 million from forecast.

For the period, average daily rate was 5 per cent lower at US$122 than what was forecast, although occupancy rates remained strong at 77 per cent.

As a result, gross revenue was 7.9 per cent lower at S$115 million. NPI dropped 20.3 per cent to S$32.6 million from what was forecast.

The managers said the Covid-19 situation is being closely monitored by the US authorities. Given the limited number of cases in the US, they believe there is a lower risk of impact to ARA H-Trust's portfolio compared to hotels in gateway cities, as the majority of the portfolio's demand is predominantly oriented towards domestic business and leisure travellers.

"Nevertheless, the managers are actively monitoring the situation in the US and our hotels are actively taking precautions and putting in place measures to minimise the risk of virus exposure to our guests and employees," the managers added. 

Stapled securities of the mainboard-listed stapled group closed one US cent or 1.2 per cent higher at 0.865 US cent on Tuesday.

ARA H-Trust is a hospitality stapled group comprising ARA US Hospitality Management Trust which runs the hotels in the group's portfolio, and ARA US Hospitality Property Trust which holds the properties.