ARA H-Trust’s H2 DPS rises 18.6% to US$0.01929

ARA US Hospitality Trust’s (ARA H-Trust) distribution per stapled security (DPS) for the half year ended December 2023 was up 18.6 per cent to US$0.01929, from US$0.01627 in H2 FY2022.

The distribution will be paid out on Mar 28, 2024, after the record date on Mar 1, reported the stapled group’s managers on Thursday (Feb 22).

Revenue rose 2 per cent year on year to US$89.5 million, while net property income (NPI) climbed 26.4 per cent to US$25.7 million.

The topline growth was backed by higher portfolio occupancy, which improved to 69.5 per cent from 68 per cent previously, as well as a rise in revenue per available room (RevPAR) to US$96 from US$91.

This contributed to an 18.9 per cent increase in distributable income to US$11.2 million for the latest half-year period.

ARA H-Trust’s net asset value per stapled security as at the end-2023 however, fell to US$0.74 from US$0.80 in the same period a year ago, which its managers attributed to a decline in portfolio valuation from higher capitalisation rates.

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The trust’s overall portfolio value as at end-2023 nonetheless grew 0.5 per cent on the year at US$751.4 million compared to US$747.8 million as at end-2022, due to higher interest rates and upon the inclusion of the recently acquired Hilton Hotel.

The latest set of half-year results brings ARA H-Trust’s DPS for the full year to US$0.0343, up 12.3 per cent from US$0.03054 in FY2022.

Revenue rose 3.8 per cent to US$175.5 million in FY2023 while NPI grew 15.1 per cent to US$47.7 million, contributing to 13.3 per cent higher distributable income of US$19.8 million for FY2023.

Though its managers noted that occupancy rates have yet to fully return to pre-pandemic levels due to “lagging” business travel demand, they believe strong daily average room rate growth helped to boost overall RevPAR for the year.

Lee Jin Yong, chief executive of the managers, said: “As our portfolio is orientated towards domestic leisure and business travellers, we will continue to benefit from the growth in RevPAR in the coming year.”

As at Dec 31, 2023, the trust’s net gearing stood at 40 per cent, up from 35.4 per cent as at Dec 31, 2022.

Its weighted average debt maturity stands at 2.5 years, compared to 1.5 years at end-2022.

All debts maturing in FY2024 have been refinanced, said the managers, who added that they are “proactively seeking” to refinance the trust’s upcoming US$77 million loan due February 2025.

Stapled securities of ARA H-Trust : XZL 0% closed on Wednesday US$0.005 or 1.9 per cent higher at US$0.27.