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CDL Hospitality Trusts’ (CDLHT) Q2 2015 gross revenue increased on an annual basis, but the figure for the first half of the year declined marginally, the trusts’ SGX filing yesterday showed.
In the second quarter, its gross revenue rose by 3 percent to S$39 million compared to S$37.85 million in Q2 2014 mainly due to the S$2.3 million contribution from the Japanese hotels it acquired in December 2014 and better earnings from its Maldives Resorts which were buoyed by the stronger US dollar.
“However, this improvement was affected by reduced rent contribution of S$0.9 million from the Singapore hotels. The Australia hotels and New Zealand hotel also recorded lower contributions due to the weakening of Australia dollar and New Zealand dollar against the Singapore dollar,” it said.
As for net property income (NPI), it rose slightly by 0.9 percent to S$31.6 million from S$31.33 million previously, while distributable income declined by 9.2 percent from S$24.4 million to S$22.14 million.
Notably, the latter figure doesn’t include the contribution from the Japanese hotels as they would be released in Q4 2015 once the financial results of its subsidiary there have been audited. Consequently, income to be distributed per stapled security (DPU) fell by 10 percent from 2.5 cents to 2.25 cents in the second quarter.
This brought CDLHT’s gross revenue for 2H 2015 to S$81.21 million, down from the S$81.60 million in the corresponding period last year, while net property income slipped by 2.8 percent from S$68.06 million to S$66.19 million.
Furthemore, distributable income slumped by 10.1 percent to S$46.11 million from S$51.28 million in 1H 2014, with income to be distributed per stapled security contracting by 10.8 percent from 5.25 cents to 4.69 cents.
According to Credit Suisse, the distributable income per stapled security of 4.69 cents was below its projections by about 44 to 45 percent.
The Swiss financial institution also maintained its neutral outlook on CDLHT as its future financial performance would be weighed down by stiff competition and the weaker demand in Singapore’s hospitality sector, given that the city-state accounts for 70 percent of its NPI.
Image: CDL Hospitality Trusts’s Orchard Hotel (Source: CDLHT)
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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