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CDL Hospitality Trusts reports 11.0% lower DPS of 3.06 cents for 2HFY2021

·4-min read

This brings total DPS for the FY2021 to 4.27 cents, which fell 13.7% y-o-y.

CDL Hospitality Trusts (CDLHT) reported a distribution per stapled security (DPS) of 3.06 cents for the 2HFY2021 ended December, down 11.0% y-o-y.

This brings total DPS for the FY2021 to 4.27 cents, which fell 13.7% y-o-y.

2HFY2021 revenue improved 39.7% y-o-y to $91.5 million amid the recovery of lodging demand on the back of the relaxation of travel restrictions and the broader distribution of vaccines.

The trusts’ Singapore hotels, including W Hotel, achieved an occupancy rate of 75.3%, down 10.8 percentage points y-o-y. However, the hotels’ average daily rate improved by 26.8% y-o-y to $121, while its revenue per available room (RevPAR) grew 11.0% y-o-y to $91 during the 2HFY2021.

2HFY2021 net property income (NPI) increased 24.1% y-o-y to $49.1 million in tandem with the higher revenue, and with improvement attributed to its properties in the UK, Maldives, Germany, New Zealand and Japan.

The sum was offset by lower NPI from its remaining properties, which was partly due to the divestment of Novotel Clarke Quay and Novotel Brisbane.

Interest costs for the half-year period inched up slightly at 2% y-o-y due to higher borrowings.

Despite the higher revenue and NPI, CDLHT’s distributable income fell 10.6% y-o-y to $37.6 million as capital distribution fell 23% y-o-y. The sum includes a capital distribution from CDLHT’s UK properties and partial distribution of sales proceeds from the past hotel divestments.

Even though NPI for CDLHT’s hotels in the UK and Raffles Maldives Meradhoo grew y-o-y, the growth did not contribute to a corresponding increase in distribution, as part of the increase was largely due to the low base effect attributed to losses in NPI in the year before for some of the hotels, explains CDLHT in a Jan 28 statement.

Furthermore, no distribution was available from the trusts’ hotels in Germany and Italy as well, as NPI was recorded based on straight line accounting rent. To be sure, the actual rent received (under the restructured rent arrangement with the lessee) in the 2HFY2021 stood lower than the accounting rent recorded for the period.

As at end-December, cash and cash equivalents stood at $107.1 million, and a gearing of 39.1%.

“While the ongoing pandemic continues to hamper the hospitality industry, most of our portfolio reflected improving underlying performances. However, the absence of contribution from two divested assets diluted our overall result,” says Vincent Yeo, CEO of the managers.

Looking ahead, CDLHT remains positive on the Singapore market due to the high vaccination rates, as well as its strategy to live with Covid-19 as an endemic.

“In one of the strongest signals that Singapore remains committed to reopening and returning to normalcy, the STB has announced a new seven-year deal to continue hosting the Formula One race here, with the upcoming race scheduled for Oct 2,” says CDLHT.

“The agreement, which is the longest renewal with the Formula One Group, is intended to help reposition Singapore again as a business and lifestyle destination and ensure the country maintains its competitive edge in the long term,” it adds.

In the near-term, the country’s tourism sector will continue to be supported primarily by the domestic tourism business. Two of CDLHT’s six hotels continue to operate as facilities used for isolation purposes.

“Prior to the emergence of the Omicron variant, there were encouraging signs of recovery across our key markets with the progressive easing of restrictions. While there are still short-term uncertainties, the path towards an eventual recovery is being laid out by rising vaccination levels worldwide,” continues Yeo.

“We continue to look beyond the near-term impact and take a long-term view to position our portfolio to optimize the recovery trajectory upon the reopening of borders and return of travel confidence globally.”

As at 4.43pm, units in CDLHT are trading 1 cent lower or 0.88% down at $1.13.

Photo: CDLHT

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