Frasers Hospitality Trust fiscal 1Q net property income slipped on Malaysia, Japan weakness

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Frasers Hospitality Trust reported on Wednesday that its fiscal first quarter net property income slipped 1.2 percent on-year to S$31.1 million, mainly on a weaker performance for the Malaysia and Japan portfolios.

Gross revenue for the quarter ended 31 December fell 2.0 percent on-year to S$40.6 million, it said in a filing to SGX after the market closed on Wednesday.

Both the Westin Kuala Lumpur and the ANA Crowne Plaza Kobe posted lower room and food and beverage revenue for the quarter, the trust said.  But the Australia and U.K. portfolios improved as revenue per available room (RevPAR) improved due to a higher average daily rate (ADR) and higher occupancy, it said.

The distribution per stapled security (DPS) was 1.2542 Singapore cents for the quarter, down 4.3 percent from 1.3107 in the year-ago quarter, it said.

Eu Chin Fen, CEO of Frasers Hospitality Asset Management, the trust’s manager, said the first quarter was challenging.

“The performance of The Westin Kuala Lumpur continued to be affected by softer corporate demand. While ANA Crowne Plaza Kobe’s RevPAR was relatively stable in this quarter, it saw lower wedding and general banquet revenue due to a decline in wedding and year-end social events,” she said in the statement.

The Australia portfolio posted a 6.4 percent rise in gross operating revenue, as portfolio RevPAR rose 2.7 percent, the trust said.

In Singapore, the portfolio was stable in the quarter, with gross operating revenue edging up 0.3 percent on-year on higher food and beverage revenue from InterContinental Singapore, while gross operating profit slipped 0.4 percent, mainly on higher utilities costs, it said.

RevPAR in the city-state fell 1.8 percent on-year on a lower ADR from InterContinental Singapore and Fraser Suites Singapore.

“Competition from new entrants in the Bugis precinct and softness in corporate long stay demand continued to exert downward pressure on the portfolio ADR,” Frasers Hospitality Trust said.

In the U.K., gross operating revenue increased 9.3 percent on-year, with all properties in the portfolio posting higher ADR, the trust said.

The Westin Kuala Lumpur’s RevPAR fell 11.6 percent on-year on lower ADR and occupancy, it said.

“Corporate demand in the city remained weak, affecting both room and F&B revenue,” the trust said, although it noted the hotel was maintaining market share.

“With the weaker economic climate, corporations have been renewing their contracts at lower rates. The hotel remains focused on expanding its customer base,” it said.

Frasers Hospitality Trust has 15 properties across Australia, the U.K., Singapore, Japan and Germany.

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