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EHT posts Q4 DPS of 1.179 US cents, 24.4% below IPO forecast
EAGLE Hospitality Trust (EHT) posted a distribution per stapled security (DPS) of 1.179 US cents for the fourth quarter ended Dec 31, 24.4 per cent lower than its initial public offering (IPO) forecast of 1.56 US cents.
Revenue was down 13.1 per cent to US$20.5 million for the quarter, from the US$23.6 million forecast, according to a regulatory update on Tuesday.
This was due to less favourable US lodging market fundamentals, roof repairs at its largest asset - the Holiday Inn Resort Orlando Suites, as well as impact by the ramp from construction delays, EHT's managers said.
Net property income (NPI) fell 14.7 per cent on the year to US$14.7 million for the quarter, from a US$17.3 million forecast.
Income available for distribution declined 24.3 per cent year on year to US$10.3 million, from US$13.7 million forecast.
The distribution will be paid out on March 30, after books closure on Feb 25.
Meanwhile, for May 24 - EHT's listing date - to Dec 31, DPS was 10.2 per cent lower at 3.478 US cents, versus a forecast of 3.872 cents. Income available for distribution for the period fell 10.1 per cent from forecast to US$30.4 million. Revenue was 10.1 per cent lower than forecast at US$51.6 million, while NPI eased 7 per cent to US$42.9 million from what was forecast.
Salvatore Takoushian, president and chief executive of EHT's managers, said: "We are positioned for incremental market share gains from further ramp-up associated with the significant recent capital expenditures and numerous asset management initiatives."
On the Covid-19 situation, Howard Wu, founder and principal of EHT sponsor Urban Commons, said EHT's portfolio remains relatively insulated given the "de minimis proportion" of international guests originating from the more affected regions in Asia.
EHT's managers also announced on Tuesday that the sponsor of Eagle Hospitality Real Estate Investment Trust (EH-Reit), as master lessee, has agreed to amend the master lease agreements in favour of stapled security holders.
This means EH-Reit will be able to receive more rent from any outperforming properties that produce excess cash flow. Some 80 per cent of the excess cash flow from outperforming properties will also be applied to shortfalls in the rent of any underperforming properties.
"This amendment is non-prejudicial to stapled securityholders and could only result in additional rent for EH-Reit," EHT's managers said.
EHT is a stapled group comprising EH-Reit and Eagle Hospitality Business Trust.
Stapled securities of the EHT closed at US$0.530 on Monday, up 0.5 US cent or 1 per cent, before the results were released.