Far East Hospitality Trust (FEHT) has reported a distribution to stapled securityholders (DPS) of 4.09 cents for the FY2023 ended Dec 31, 2023, 25.1% higher y-o-y. DPS for the 2HFY2023 also rose by 25.4% y-o-y to 2.17 cents.
The higher DPS comes as the REIT saw higher gross revenue, net property income (NPI) and distributable income on a y-o-y basis for both the full-year and six-month period.
Gross revenue for the FY2023 grew by 27.8% y-o-y to $106.8 million due to improvements across all segments. During the year, FEHT saw higher master lease rental from its hotels and serviced residences (SRs). All properties on the master lease rental performed above the minimum fixed rent, achieving variable rents similar to that of 2019. FEHT also reported higher revenue from its retail and office spaces, which grew by 9.2% y-o-y to $16.2 million.
FY2023 NPI rose by 27.7% y-o-y to $98.7 million due to the higher revenue.
Distributable income also grew by 27.3% y-o-y to $75.1 million due to the higher NPI. The distributable income for the 2HFY2023 included the release of $2.3 million that was not distributed in the 1HFY2023.
In the FY2023, FEHT’s hotels saw a recovery in leisure travellers and corporate groups, which led to a higher average daily rate (ADR) of $170, 36.1% higher y-o-y. Average occupancy improved by 6.3 percentage points y-o-y to 80.1%. Revenue per available room (RevPAR) increased by 47.8% y-o-y to $136.
See also: IHH Healthcare’s 3QFY2024 patmi remains flat at RM534 mil
SRs also improved with ADR rising by 16.6% y-o-y to $260 and average occupancy increasing by 0.3 percentage points y-o-y to 87.8%. Revenue per available unit (RevPAU) grew by 17.0% y-o-y to $229.
As at Dec 31, 2023, FEHT’s aggregate leverage stood at 31.3%, 0.7 percentage points lower. Its interest coverage ratio stood at 3.5 times.
Cash and cash equivalents as at the same period stood at $63.1 million.
See also: Marco Polo Marine reports lower 2HFY2024 earnings of $10.7 mil, down 42% y-o-y
“In 2023, FEHT’s hotels and serviced residences displayed a strong recovery. For the full year, the trust achieved a distribution income that surpassed the pre-pandemic level in 2019. Building on the various efforts undertaken in the last few years, including optimising the performance of our assets, crystalising value through the strategic divestment of Central Square as well as prudent capital management amidst the high inflationary and interest rate environment, the trust is well positioned to ride on further recovery of the hospitality sector,” says Gerald Lee, CEO of the REIT manager.
“While challenges remain in the short to medium term, the manager will continue to explore all opportunities to further grow revenue and distribution to stapled securityholders in the year ahead,” he adds.
Looking ahead, the manager remains optimistic, seeing a “healthy pipeline” of MICE (or meetings, incentives, conferences and exhibitions) events, large-scale performances and positive policy changes including the 30-day visa waiver for Chinese travellers.
Unitholders will receive their DPS on March 21.
Units in FEHT closed at 64 cents on Feb 13.
