Ascott Residence Trust reports 2Q19 gross profit rose 7 percent

The Felix Hotel in Sydney, acquired by Ascott Residence Trust, to be operated under the Citadines Connect brand. Credit: Ascott Residence TrustThe Felix Hotel in Sydney, acquired by Ascott Residence Trust, to be operated under the Citadines Connect brand. Credit: Ascott Residence Trust

Ascott Residence Trust reported Tuesday its second quarter gross profit rose 7 percent on-year to S$67.66 million on higher revenue and changes to accounting for leases.

Excluding the accounting change for leases, gross profit would have fallen 1 percent on-year to S$62.5 million, Ascott REIT said.

Revenue for the quarter ended 30 June increased 2 percent on-year to S$132.49 million on the acquisition of Citadines Connect Sydney Airport in May and on higher revenue from existing properties in the Philippines, U.K. and Japan, the REIT said in a filing to SGX.

The distribution per unit (DPU) was 1.98 Singapore cents for the quarter, up 8 percent from 1.84 Singapore cents in the year-ago period, the filing said. The boost was in part due to realized exchange gains of S$3.1 million from repaying foreign currency bank loans with the divestment proceeds of Ascott Raffles Place Singapore, the REIT said.

Daiwa had forecast net property income of S$65.2 million on revenue of S$136.2 million, with a DPU of 1.87 Singapore cents.

“Ascott Reit’s DPU continued to grow steadily in the second quarter, affirming our proactive efforts to enhance the quality of our portfolio, and Ascott Reit’s strength as the most geographically diversified REIT listed in Singapore,” Bob Tan, chairman of Ascott Residence Trust Management, the REIT’s manager, said in a statement.

“In the first half of this year, we divested Ascott Raffles Place Singapore at 64 percent above book value and acquired Citadines Connect Sydney Airport, a prime business hotel,” he added. “With our recent proposed combination of Ascott Reit and Ascendas Hospitality
Trust (A-HTRUST), we expect higher stable income for the combined entity at 46 percent of gross profit.”

For the Philippines, gross profit increased 36 percent on higher revenue from refurbished apartments at Ascott Makati and lower operating costs, while Spain and Belgium saw stronger leisure demand, with gross profit there rising 29 percent and 22 percent, respectively, Ascott REIT said. U.K. gross profit rose 12 percent on higher demand for corporate and leisure travelers, while Vietnam’s gross profit increased 7 percent, mainly on stronger demand from project groups and higher commercial rent, it added.

For the first half, Ascott REIT posted gross profit rose 9 percent to S$122.27 million on revenue of S$248.41 million, up 2 percent on-year.

Ascott REIT’s portfolio includes 74 properties with more than 11,700 units across 37 cities in Asia Pacific, Europe and the U.S.

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