The managers of Frasers Hospitality Trust ACV (FHT) have reported a distribution per stapled security (DPS) of 1.091 cents for the 1HFY2024 ended March 31, 13.7% lower y-o-y.
The drop was due mainly to higher finance costs as borrowings were refinanced in a higher interest rate environment.
Income available for distribution fell by 13.7% y-o-y to $23.4 million while distribution to stapled security holders, which is based on a 90% payout of the income available for distribution, also fell by 13.7% y-o-y to $21.0 million.
Gross revenue for the 1HFY2024 rose by 1.7% y-o-y to $63.3 million as the trust saw a slight improvement in the performance of its hospitality portfolio. The higher revenue also includes FHT’s assumed economic interest in Koto no Hako Kobe, the retail component of ANA Crowne Plaza Kobe, from March 1 onwards.
Net property income (NPI) dipped by 1.3% y-o-y to $44.7 million due to higher operating expenses and an increase in Singapore property taxes.
Across FHT’s geographies, all markets saw broad-based y-o-y growths in gross operating revenue and gross operating profit except for Singapore and the UK.
See also: Kimly reports higher FY2024 revenue but earnings down on higher depreciation and other costs
The average daily rate (ADR) for FHT’s Singapore portfolio grew by 3.4% y-o-y to $382 in the 1HFY2024 while its occupancy rate fell by 7.4 percentage points y-o-y to 68.9% due mainly to the extended-stay segment. As a result, revenue per available room (RevPAR) fell by 6.7% y-o-y to $263.
The UK’s portfolio RevPAR fell by 4.4% y-o-y to GBP104 ($176.13) as ADR fell by 4.4% y-o-y to GBP134. The UK portfolio occupancy rate rose slightly at 0.1 percentage points y-o-y to 77.6%.
In Australia, portfolio RevPAR increased by 7.8% y-o-y to A$233 ($207.84). Occupancy rose by 5.7 percentage points to 84.2% while ADR inched up by 0.37% y-o-y to A$277.
See also: LHN reports higher FY2024 earnings on fair value gains and better operations (update)
The ANA Crowne Plaza Kobe in Japan saw RevPAR increase by 15.3% y-o-y to JPY9,268 ($80.79) due to the spillover demand from strong inbound tourism to Japan from the weakening yen.
ADR increased by 4.7% y-o-y to JPY14,520 while occupancy improved by 5.9 percentage points y-o-y to 63.8%.
Malaysia’s The Westin Kuala Lumpur reported a RevPAR of 460 ringgit ($131.46) as ADR and occupancy rates grew. ADR grew by 12.8% y-o-y to 552 ringgit while occupancy rate grew by 5.6 percentage points to 83.3%.
Germany’s Maritim Hotel Dresden didn’t report figures but it saw “further y-o-y improvement” during the six-month period with stronger ADR growth and supported by a recovery in domestic travel after the lifting of travel restrictions.
As at March 31, FHT’s aggregate leverage ratio stood at 35.5%. Its interest coverage ratio (ICR) stood at 3.1 times.
Net asset value (NAV) per stapled security stood at 66.18 cents.
“Our globally diversified portfolio enables us to capture further recovery opportunities whilst maintaining resilience amidst a challenging operating landscape. As we navigate through the macroeconomic and geopolitical uncertainties and challenges ahead, we remain cautiously optimistic about the continued recovery of the hospitality industry in the year ahead and committed to delivering long-term sustainable returns to our stapled securityholders,” says Eric Gan, CEO of the managers.
For more stories about where money flows, click here for Capital Section
Looking ahead, the managers see costs possibly impacted by persisting inflation, high interest rates, volatile oil prices and disruptions to trade, even though the World Tourism Organisation anticipates international tourism to fully recover to pre-pandemic levels.
“The economic and geopolitical headwinds could pose significant challenges to the sustained recovery of international tourism and confidence levels as tourists are expected to increasingly seek value for money and travel closer to home,” says FHT in its May 9 statement.
Unitholders will receive their distributions on June 28.
As at 9.45am, units in FHT are trading 0.5 cents lower or 1.09% down at 45.5 cents.
