Far East Hospitality Trust declares 3.2% lower 1Q DPS of 0.91 cent

Samantha Chiew

SINGAPORE (Apr 25): The manager of Far East Hospitality Trust (FEHT) has declared 1Q19 DPU of 0.91 cent, 3.2% lower than 0.94 cent in 1Q18.

Income available for distribution also saw a slight 1.2% decrease to $17.4 million from $17.6 million a year ago.

As at Mar 31, the trust’s portfolio includes 13 properties consisting of nine hotels and four serviced residences (SR) located in Singapore, as well as the Sentosa development project.

Gross revenue was 8.0% higher at $27.8 million, compared to $25.7 million a year ago, mainly due to an increase in master lease rental from the hotels.

Property expenses remained flat y-o-y at $2.7 million, bringing net property income for 1Q19 to $25.1 million, 9.0% higher than $23.0 million last year.

The hotels continued to enjoy high occupancies, fuelled by rising visitor traffic to Singapore. Contribution from the corporate segment was lower in the quarter as there were fewer major events, and as companies continued to exercise prudence in their business travel spending.

The average occupancy of the hotel portfolio was marginally lower year-on-year by 0.4 percentage point (pp) at 89.2%. The average daily rate (ADR) was 1.1% higher at $157. As a result, revenue per available room (RevPAR) improved by 0.7% to $140.

Meanwhile, performance of SR was more stable, and although demand from the corporate segment remained subdued, there was growth from some industries and other market segments, which helped to relieve downward pressure on ADR.

The average occupancy of the SR portfolio decreased 1.1pp to 80.2%. ADR was higher by 1.3%. As a result, revenue per available unit (RevPAU) of the SR portfolio was flat year-on-year at $174.

Finance expenses increased by 48.6% y-o-y to $7.7 million.

Share of results of joint venture saw a significant decline to a loss of $2.4 million from just a loss of $46,000 the same period in the previous year.

Gerald Lee, CEO of the manager says, “The hotels continued to achieve high occupancies, although corporate demand was relatively softer as compared to the same period last year given the absence of major events such as the biennial Singapore Airshow. The increase in hotel room supply is expected to be moderate in the near future, providing some stability to facilitate a recovery in the sector.”

Units in FEHT last traded at 66 cents on Wednesday.