UPDATE: CDL Hospitality Trusts reports 3Q19 net property income slipped, missing Daiwa forecast

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This article was originally published on Wednesday, 30 October 2019 at 8:14 A.M. SGT; it has since been updated with more details.

CDL Hospitality Trusts reported Wednesday its third quarter net property income (NPI) fell 1.5 percent on-year to S$35.67 million on the impact of weaker currencies. The results missed a forecast from Daiwa.

Revenue for the quarter ended 30 September declined 1.8 percent on-year to S$49.13 million, the REIT said in a filing to SGX.

The distribution per stapled security (DPS) was 2.09 Singapore cents, down 4.1 percent from 2.18 Singapore cents in the year-ago period, the filing said.

“Due to the cyclical nature of hospitality markets, some of our overseas properties are seeing more competitive trading conditions in the near term amidst a more subdued macro-economic environment and global uncertainties,” Vincent Yeo, CEO of the REIT’s managers, said in the statement.

“Nevertheless, we are encouraged by the recovery in performance of our Singapore Hotels, which form the core of our portfolio. Limited new hotel supply in the next few years and exciting tourism infrastructure plans by the Singapore government will continue to provide a favorable environment for medium to long-term growth,” he added.

Daiwa had forecast net property income of S$38.6 million on gross revenue of S$56.2 million, with a DPS of 2.29 Singapore cents.

“CDLHT’s Singapore hotels recorded higher NPI contribution, underpinned by a stronger underlying performance and better trading conditions. Hotel Cerretani Florence, acquired in end November 2018, also provided inorganic support to the overall portfolio NPI,” the trust said in the statement.

“However, this increase was more than offset by lower NPI contribution from the rest of CDLHT’s overseas properties, in part due to weaker currencies. Trading conditions in Auckland (New Zealand), Tokyo (Japan) and Maldives were competitive while Munich (Germany) hosted less events due to a cyclically lighter events calendar,” the trust added.

For the Singapore hotels, revenue per available room (RevPAR) increased 4.9 percent on-year in the quarter, the highest quarterly on-year growth rate since 2012, to S$174 on room rate growth and high average occupancy of 91.4 percent, up from 90.8 percent in the year-ago quarter, the filing said.

“This was supported by a stronger leisure market with potentially some degree of diversion of tourism flows to Singapore as a result of the
unrest in Hong Kong. The Formula One Singapore Grand Prix, which saw the second-highest three-day attendance in its 12-year history also helped to generate additional business,” CDL Hospitality Trusts said.

For the nine-month period, CDL Hospitality Trusts reported net property income fell 4.1 percent on-year to S$103.20 million on revenue of S$142.90 million, down 4.4 percent on-year. The DPS for the nine-month period was 6.25 Singapore cents, down 3.7 percent from 6.49 Singapore cents in the year-ago period, the filing said.

CDL Hospitality Trusts’ portfolio has 16 hotels and two resorts across Singapore, Australia, New Zealand, the U.K., Germany, Italy and the Maldives.


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