The manager of CDL Hospitality Trusts (CDLHT) reported a distribution per stapled security (DPS) of 1.51 cents for the 1HFY2020 ended June, down 63.7% from the 4.16 cents posted a year ago.
Total revenue for the period registered a 44.5% decline to $52.1 million from the $93.8 million a year ago. This is mainly attributable to the unprecedented downturn in global tourism and travel arising from the Covid-19 outbreak.
With the exception of CDLHT’s hotels in its Singapore and New Zealand portfolio, most of the rest of its properties were either closed temporarily or were operating at low occupancies from March onwards.
CDLHT says while there was a lack of international demand, occupancies for its Singapore and New Zealand hotels were supported by the need for accommodation for isolation purposes. In Singapore, CDLHT’s hotels were additionally bolstered by foreign workers who were affected by the border closures.
The decline was partially mitigated by contributions from CDLHT’s portfolio rental income from its hotels in Singapore, New Zealand, and Australia, which came up to around $32.1 million.
Property expenses for 1H20 fell 40% to $43.8 million due to lower operating costs from the decline in occupancies. Employee benefit expenses decreased due to reduced staff or furloughs, and lower rental expenses from the weaker performance from its hotels in Japan.
Consequently, net property income (NPI) registered a 56.0% decrease y-o-y to $29.7 million.
CDLHT says the lowered DPS includes the retention of some $18.4 million for working capital, absence of partial distribution of proceeds from the sale of Mercure and Ibis Brisbane hotels in 2018, and the decline in net property income (NPI).
For 1H20, CDLHT has reported an average occupancy rate of 68.2%. This represents a 17.6 decrease in percentage points from its rate of 85.7% during the same period last year.
The average daily rate for 1H20 declined 36.1% y-o-y to $115.
Revenue per available room (RevPAR) fell 49.2% y-o-y to $78.
“International travel which is still largely restricted will take time to recover and the pace of which is contingent upon a viable medical solution. Nonetheless, we are preparing ourselves for an eventual recovery in global tourism, and keeping faith with the long term growth prospects of our markets even though there is significant short term uncertainty,” says Vincent Yeo, CEO of the manager.
“Similarly, while we are deferring non-essential capital expenditure, we have utilised periods of low occupancy to carry out critical guests-related asset enhancement works,” he adds.
As at June 30, CDLHT has a gearing of 37.1% and headroom of $777 million (at 50% gearing limit).
As at 11.28am, units in CDLHT are changing hands 1.5 cents lower or 1.5% down, at 97 cents.
