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Frasers Hospitality Trust posts 4.1% drop in Q4 DPS to 1.1655 S cents

INTERNATIONAL hotel investor Frasers Hospitality Trust’s distribution per stapled security (DPS) fell 4.1 per cent to 1.1655 Singapore cents for the fourth quarter ended Sept 30 from 1.2154 cents for the year-ago quarter.

This was due to decreases in the gross operating revenue and gross operating profit of its Australia portfolio amidst a challenging trade environment in Sydney and Melbourne, the stapled trust said in a regulatory filing on Wednesday morning.

Gross revenue was up 2.1 per cent to S$39.5 million for the quarter, from S$38.7 million a year ago.

Net property income (NPI) also grew 2.3 per cent on the year to S$30 million for the quarter, from S$29.4 million.

These improvements were due to better overall portfolio performance, partially offset by foreign exchange impact arising largely from a weaker Australian dollar and the British pound.

Income available for distribution (DI) declined 2.9 per cent year on year to S$22.3 million from S$23 million the year before, mainly due to a write-back of tax provision included for the DI a year ago.

The distribution will be paid out on Dec 27, after books closure on Nov 7.

Colin Low, chief executive of the manager of Frasers Hospitality Real Estate Investment Trust and the trustee-manager of Frasers Hospitality Business Trust, said the Singapore portfolio recorded higher room rates at higher occupancy levels of above 90 per cent.

The UK portfolio continued to benefit from the weaker pound which led to all properties recording healthy gains in revenue per available room. The Japan portfolio also reported higher room, and food and beverage revenue, boosted by events including the Rugby World Cup 2019.

However, these gains were partially offset by the Australia portfolio, Mr Low said, adding that the managers will continue to work closely with operators to drive revenue growth and operational efficiency.

For the full year ended Sept 30, DPS was 7.3 per cent lower at 4.4129 Singapore cents, versus 4.7613 cents a year ago, and income available for distribution fell 6.1 per cent to S$83.9 million, from S$89.4 million the year before.

Gross revenue was 3.9 per cent lower at S$149.8 million from S$155.9 million the year prior, while NPI fell 4.6 per cent to S$111.7 million from S$117 million the previous fiscal year.

Total borrowings were S$854.2 million as at Sept 30, with gearing at 35.1 per cent.

Mr Low said: "Coupled with our debt headroom, we continue to have the financial flexibility to pursue assets with better returns by acquiring from the right of first refusal pipeline from our sponsor, Frasers Property, or from third parties."

Frasers Hospitality Trust’s stapled securities closed at 0.725 Singapore cents on Tuesday, down 0.5 cent or 0.7 per cent.

Frasers Hospitality Trust - a stapled trust comprising Frasers Hospitality Real Estate Investment Trust and Frasers Hospitality Business Trust - owns 15 properties across Singapore, Australia, Britain, Japan, Malaysia and Germany.