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CDLHT reports 2HFY2022 DPS of 3.59 cents, up by 17.3% y-o-y

Felicia Tan
·4-min read


The back of Grand Copthorne Hotel, one of the hotels under CDLHT. Photo: CDL

SINGAPORE (EDGEPROP) - The managers of CDL Hospitality Trusts (CDLHT) have reported a distribution of stapled security (DPS) of 3.59 cents for the 2HFY2022 ended Dec 31, 2022, 17.3% higher y-o-y.

During the period, revenue increased by 42.9% y-o-y to $130.7 million on the back of the recovery in global travel.

The manager notes that the recovery was due to the initial leisure demand as well as the return of corporate groups and citywide events.

Net property income (NPI) increased by 48.1% y-o-y to $72.8 million in tandem with the higher revenue. The improvement was also largely attributed to CDLHT’s Singapore portfolio and offset by lower NPI from the trust’s Grand Millennium Auckland in New Zealand and two resorts in the Maldives. The

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Total distribution to stapled securityholders increased by 18.4% y-o-y to $44.5 million after retention for working capital.

On a same-store basis, excluding the capital distribution of $12.5 million in the 2HFY2021 from the sale proceeds of past divestments, CDLHT’s total distribution and DPS for the 2HFY2022 would have improved by 77.3% and 75.1% y-o-y respectively.

For the FY2022, CDLHT’s DPS increased by 31.9% y-o-y to 5.63 cents.

Revenue for the period grew by 45.4% y-o-y to $229.4 million thanks to the recovery in global travel.

NPI increased by 43.7% y-o-y to $123.7 million.

Total distribution to stapled securityholders grew by 32.6% y-o-y to $69.7 million.

During the 2HFY2022 and FY2022, the trust saw higher interest costs mainly due to higher funding costs on its floating rate loans and on refinancing of fixed rate loans, as well as interest expenses incurred on additional loans taken to fund the acquisition of Hotel Brooklyn.

According to the managers, the interest expense incurred on the UK build-to-rent (BTR) development project in Manchester was capitalised and did not affect the trust’s distributions.

As at Dec 31, 2022, CDLHT’s total portfolio value increased by 6.2% y-o-y to $2.8 billion, mainly due to the Singapore portfolio, the inclusion of Hotel Brooklyn and construction progress of The Castings.

The trust’s gearing stood at 36.6% with a debt headroom of $790.4 million and $348.9 million of reserves as at Dec 31, 2022.

Cash and cash equivalents stood at $95.3 million as at Dec 31, 2022.

“Global travel recovered strongly beyond expectations in 2022, despite the absence of international travellers from China. In Singapore, our core market, robust demand materialised in the second half of the year, further boosted by the return of citywide events and conventions from September 2022,” says Vincent Yeo, CEO of the managers.

“Our portfolio continued to benefit from the recovery, with majority of our hotels achieving revenue per available room (RevPAR) levels in 4QFY2022 exceeding that of 4QFY2019 pre-pandemic levels,” he adds.

For the FY2022, CDLHT’s Singapore saw a 95.3% y-o-y increase in its average daily rate (ADR) of $219. The portfolio’s RevPAR more than doubled to $166, from FY2021’s $82.

CDLHT’s overseas portfolio also saw improvements in their RevPAR with the exception of New Zealand, which saw RevPAR fall by 26.8% y-o-y to NZ$128 ($109.06). The country’s Grand Millennium Auckland was reopened to the public in the 2HFY2022 after having served as a managed isolation facility throughout 2HFY2021.

“Despite the full border reopening from July 31, 2022, the New Zealand Hotel has been slow to recover due to the progressive restoration of long haul flight capacity with demand still primarily limited to air crew business and domestic leisure travellers,” explain the trust’s managers.

Looking ahead, CDLHT’s Yeo says the reopening of China’s borders should “boost international tourism in 2023 and beyond, helping to mitigate the inflationary cost challenges and higher interest rate environment”.

“We remain confident in the medium to long term prospects, especially in our core market Singapore, and will assess opportunities to carry out asset enhancements to strengthen the competitiveness of our hotels,” he adds.

Units in CDLHT closed 1 cent higher or 0.75% up at $1.35 on Jan 27.

Read also: CapitaLand Ascott Trust reports 47% increase in 2HFY2022 DPS of 3.33 cents

This article first appeared on The Edge Singapore.

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