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CDLHT posts 3.3% fall in Q2 DPS on weaker showing from Singapore, Maldives hotels

CDL Hospitality Trusts (CDLHT) on Tuesday morning posted a 3.3 per cent fall in its total distribution per stapled security (DPS) to 2.07 Singapore cents for the second quarter ended June 30, down from 2.14 cents a year ago.

Total distribution to stapled securityholders, after retention for working capital, declined 2.6 per cent to S$25.1 million from S$25.8 million a year ago.

Gross revenue for the quarter inched down by 0.5 per cent to S$47.5 million from S$47.7 million a year ago.

Net property income (NPI) edged up by 0.5 per cent year on year to S$33.8 million from S$33.6 million, boosted by better performance of Pullman Hotel Munich in Germany and the UK hotels, and inorganic contribution from Hotel Cerretani Florence.

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However, the growth in NPI was largely offset by the drop in contribution from Singapore and Maldives, mainly due to extensive room enhancement works at Orchard Hotel in Singapore and the closure of Raffles Maldives Meradhoo for renovation.

Apart from the renovation works affecting the performance of the Singapore hotels, there was also softer overall demand in the Singapore market due to economic uncertainty and regional elections in nearby countries such as India, Indonesia and Australia. The biennial Food&HotelAsia event was also absent this year.

Meanwhile, NPI contribution from New Zealand and Japan was lower due to competitive trading conditions, while fixed rent from the Australia hotels fell due to a weaker Australian dollar.

Interest expense for Q2 rose S$0.9 million mainly because of additional loans to fund the acquisition of Hotel Cerretani Florence in November 2018 and for asset enhancement works, as well as higher funding costs on the floating rate loans.

For the half year ended June 30, NPI fell 5.4 per cent to S$67.5 million, while gross revenue shrank 5.8 per cent to S$93.8 million.

Total distribution to stapled securityholders, after retention for working capital, was down 3.5 per cent year on year to S$50.4 million for the half year.

CDLHT is a stapled group comprising CDL Hospitality Real Estate Investment Trust (H-Reit) and CDL Hospitality Business Trust (HBT).

Stapled securities of CDLHT closed flat at S$1.64 on Monday, before the results were released.