CDL Hospitality Trusts posts 19.2% lower DPS of S$0.0122 for H1 despite higher NPI

CDL Hospitality Trusts' (CDLHT) J85 : J85 0%distribution per stapled security (DPS) fell 19.2 per cent to 1.22 Singapore cents for its first half ended June 30, from 1.51 cents a year ago, citing post-rent restructuring, a low base effect from earlier losses and the absence of one-off contributions from a divestment in the first half of 2020.

This is despite posting a 24.4 per cent higher year-on-year net property income (NPI) of S$37 million, compared with S$29.7 million for the year-ago period.

In a bourse filing on Friday morning, the managers said that the lower DPS can be attributed to three reasons:

• first, an NPI increase of S$5.4 million for UK hotels and Raffles Maldives Meradhoo was "largely due to the low base effect" that arose from losses in NPI recorded in the year-ago period, over and above expenses below NPI that needed to be accounted for;

• second, post-rent restructuring for CDL's hotels in Germany and Italy because rent recorded was higher than the actual rent received, and after deducting interest, no distribution was left from the rent received; and

• third, the dissolution of the management corporation strata title relating to the divestment of Novotel Singapore Clarke Quay in the first half of last year did not result in any one-off contributions to distributable income.

CDLHT's revenue per available room (RevPAR) for its six Singapore hotels declined year on year by 9.5 per cent to S$72 from S$79 in H1 2020, while overseas, the only countries that saw gains were Australia and New Zealand.

It also recorded nearly S$15 million in distributable income, which it said it would distribute on Aug 27.

It posted a gross revenue of S$66.2 million, and gearing of 39.1 per cent with debt headroom of S$595 million, for the half-year period as well.

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In comments published in the stapled group's filings with the Singapore exchange, chief executive officer of CDLHT's managers Vincent Yeo noted the mitigating effect of widespread vaccination efforts against Covid-19 in accelerating the ease of restrictions and the restart of international travel in Europe.

"The performance of our UK and Germany hotels has been encouraging, and we are experiencing some of the highest occupancies since the onset of Covid-19," he said. "We are optimistic that such form of recovery could follow in other markets upon the continued easing of restrictions and quarantine requirements.

“As we head towards travel normalcy, we will continue to work closely with our operators and lessees to ride on the recovery, while maintaining tight costs control measures to protect the bottom line," he added.

Earlier this week, it also announced it would be diversifying its portfolio to include rental housing, co-living, student accommodation and senior housing.

CDLHT is a stapled group comprising CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust. The counter closed down by S$0.02, or 1.63 per cent, at S$1.21 on Friday.

READ MORE:

• Pandemic pushes CDLHT to explore lodging and accommodation assets

• Hospitality Reits could register higher RevPAR in Q2, with recovery in 2022

• CDL Hospitality Trusts' H2 DPS falls 29.2% to 3.44 S cents