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Ascott Residence Trust H1 2020 DPS expected to fall by 65-75%

ASCOTT Residence Trust's (ART) distribution per stapled security (DPS) for the six months ended June 30 is expected to fall by 65 per cent to 75 per cent from the 3.43 Singapore cents recorded in the first half of 2019, the managers said.

This comes amid a challenging global environment in the same period, the managers said in a profit guidance released on Monday.

The stapled group's financial performance is expected to be "adversely impacted" due to the unprecedented disruption brought by the novel coronavirus pandemic, the managers said.

In view of the uncertainty surrounding the Covid-19 situation, the managers said they are exercising prudence in capital and cash flow management and may review the level of distribution payout to stapled securityholders.

ART's available income for distribution for the first half of 2020 is expected to be reduced by 55 per cent to 65 per cent from the S$74.6 million recorded a year ago for the same period.

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The stapled group's total return for H1 2020 is expected to decline by 80 per cent to 90 per cent from the S$212.5 million recorded a year ago for the same period. Excluding fair-value gains for H1 2019, total return for H1 2020 is expected to fall by 55 per cent to 65 per cent compared with H1 2019.

In H1 2019, ART recorded fair-value gains of S$140.6 million after tax and minority interest. This included a realised fair-value gain of S$135 million from the divestment of Ascott Raffles Place Singapore.

As the timing of a full recovery remains uncertain, the managers are expecting the revenue per available unit of ART's properties to remain "under pressure" in the near term.

The managers of ART said the stapled group has sufficient liquidity to meet its operational needs and financial commitments.

They also noted that ART's geographically diversified portfolio has provided resilience to its earnings under usual business conditions.

The managers will release ART's H1 2020 unaudited financial results on July 28 before 8am.   

Stapled securities of ART closed at S$1.03 on Thursday, down S$0.01 or 1 per cent.

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