Accordia Golf Trust fiscal 1Q net profit fell 3 percent

Plastic sushi keychains at Japan-based DaisoPlastic sushi keychains at Japan-based Daiso

Accordia Golf Trust reported Wednesday its fiscal first quarter net profit fell 3.2 percent on-year 2.32 billion yen on higher interest and income tax expense.

Revenue of the quarter ended 30 June rose 1.2 percent on-year to 14.46 billion yen, the trust said in a filing to SGX.

“Management’s effort to improve utilisation rates at the golf courses and the improvement in weather conditions contributed to an increase in the number of players in the quarter,” Accordia Golf Trust said in a filing to SGX.

Golf course revenue increased 2.2 percent on-year to 1.0 billion yen and restaurant revenue rose 1.0 percent on-year to 3.53 billion yen, while membership revenue decreased 7.3 percent on-year to 933 million yen as renewals dropped, Accordia Golf Trust said.

Interest and finance costs were 771 million yen for the quarter, up 94.2 percent on-year, while income tax expense rose 26.8 percent on-year to 341 million yen, the filing said.

Operating profit increased 12.2 percent on-year to 3.46 billion yen in the quarter in part due to changes to the accounting for leases, the filing said.

The distribution per unit (DPU) was 2.05 yen, compared with 1.51 yen in the year-ago period, the filing said. In Singapore dollar terms, the DPU was 2.57 Singapore cents, up from 1.86 Singapore cents in the year ago period, the filing said.

The distributions are made semi-annually, for the periods ending 31 March and 30 September, the filing said.

In its outlook, the trust pointed to both economic headwinds and potential opportunities.

“The golf industry is expected to remain resilient in the face of economic slowdown, underpinned by its healthy fundamentals and steady demand from senior golfers,” Accordia Golf Trust said. It cited data from Nihon Golf-jo Keieisha Kyokai, a golf course management association, showing senior golfers’ plays increased 7 percent on-year in fiscal 2017.

“To rejuvenate the golf industry, the management will continue its efforts to engage more female and junior players. Various campaigns and programmes will continue to encourage new players and retain existing players,” Accordia Golf Trust said.

The trust said it expected golf course mergers and acquisitions would both continue and be beneficial, as operators with stronger balance sheets would be better able to face headwinds.

“We view this as an opportunity for us to cement our position as one of the top golf operator in Japan,” the trust said.

Accordia Golf Trust’s portfolio has 88 golf courses located across Japan.

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