Eagle Hospitality Trust posts US$38.9m Q2 loss

Eagle Hospitality Trust (EHT) has posted a loss of US$38.9 million for the second quarter ended June 30, mainly due to the impairment loss on trade receivables arising from the uncertainty on the master lessees' ability to make rental payments and fulfil its obligations.

As a result, there is no income available for distribution for unitholders of the hospitality stapled group comprising Eagle Hospitality Real Estate Investment Trust (EH-Reit) and Eagle Hospitality Business Trust (EH-BT), according to EHT's financial statements on Friday night. 

EHT's revenue was US$15.7 million for the quarter, 34.4 per cent lower than its projected US$23.9 million. The trust manager blamed it on the rental payments that remain "substantially outstanding and unpaid" by the master lessees.

Second-quarter net property income was US$13.9 million, 31.6 per cent below the projected US$20.4 million. The comparisons were made against projections as EHT was constituted only in April last year.

Still, EHT's earnings were wiped out by its impairment loss on rental and non-trade receivables, which amounted to US$26.3 million for the second quarter. 

For the half year, revenue was US$32.3 million, 29.6 per cent below EHT's projection. Net property income was US$26.5 million, 31.6 per cent below projection. 

Impairment loss on rental and non-trade receivables for the half year stood at US$40.3 million. 

Net asset value per stapled security as at June 30 was about US$0.81. 

Currently, 15 of EHT's hotels are shuttered amid the Covid-19 pandemic.

Earlier last week, EHT's sponsor, Urban Commons, also served it a breach notice, claiming that funds it had injected into EHT are outstanding and due for repayment. 

It also claimed it has a plan to provide financial support to EHT, but has been unable to implement this plan because of a lack of cooperation from EHT's trustee, the special committee negotiating with lenders, and EHT's third party advisers and consultants.

Trading in units of EHT was suspended on March 24, at US$0.137. The trust listed at US$0.78 in May 2019.