Ascendas Hospitality Trust's Q3 DPS down 14%

Singapore

DRAGGED down by weakness in its Australia portfolio, Ascendas Hospitality Trust (A-HTRUST) posted a 14 per cent drop in distribution per stapled security (DPS) to 1.41 Singapore cents for the third quarter ended Dec 31, 2017 .

Net property income (NPI) slipped 4.7 per cent from a year ago to S$25.2 million amid weaker performance in the Australia portfolio and translation losses in foreign-currency earnings due to the stronger Singapore dollar.

Income available for distribution, less income retained for working capital, fell 13.7 per cent to S$16 million due to lower NPI, higher trust expense, absence of one-off gain and higher amount of income retained.

Room revenue for the Australia portfolio remained healthy, chalking a 1.9 per cent increase in revenue per available room (RevPAR). But the NPI of the Australia portfolio during the quarter slipped 7.6 per cent to S$13.7 million mainly due to lower contribution from Pullman and Mercure Melbourne Albert Park.

"While some of the hotels in the Australia portfolio currently face a competitive landscape, we are confident in the overall quality of the Australia portfolio and are optimistic that it remains well positioned for the long run," said Tan Juay Hiang, CEO of the managers.

"In addition, the performance of the portfolios in the other three countries was encouraging as each of them posted improved performance year-on-year in local currency terms," he added, referring to China, Tokyo and Singapore.

The China portfolio saw a 0.7 per cent rise in NPI to S$2 million as Novotel Beijing Sanyuan benefited from strong public and corporate demand.

Though the performance of the two hotels in Japan improved, the weaker Japanese yen against the Singapore dollar led to a 5.4 per cent drop in NPI to S$6.1 million.

In Singapore, NPI for the fiscal third quarter rose 7.3 per cent to S$3.4 million on the back of an improvement in rental income contribution from Park Hotel Clarke Quay.

The trust's gearing ratio was 33.2 per cent as at Dec 31, 2017, with a weighted average debt tenor of 2.8 years and an effective interest rate of 2.7 per cent.

Mr Tan said that A-HTRUST pursued a major acquisition opportunity during the quarter but that did not materialise. "With the intention to expand into markets beyond Asia-Pacific, there will be more opportunities available and we will continue to actively seek acquisitions that can further benefit A-HTRUST and our stapled security holders."

The managers for A-HTRUST had in January agreed to sell Beijing Novotel Sanyuan and Ibis Beijing Sanyuan for 1.16 billion yuan (S$240 million).

Mr Tan said the proceeds will be deployed in investment opportunities that can enhance the performance of A-HTRUST and diversify its income stream.

A-HTRUST closed 0.56 per cent lower on Thursday at 89.5 cents.