SINGAPORE – CDL Hospitality Trusts (CDLHT) said its total distribution per stapled security (DPS) for the second half ended Dec 31, 2023, dropped 11.1 per cent to 3.19 cents from 3.59 cents.
Total distribution to stapled security holders was down 10.7 per cent year on year to $39.8 million from $44.5 million previously, CDLHT’s managers reported on Jan 30. They attributed the lower second-half total distribution and DPS to a rise in interest costs comprising funding costs on floating-rate loans and on the refinancing of fixed-rate loans, as well as interest expenses incurred on additional amounts drawn to finance asset-enhancement works.
The half-year period’s total distribution and DPS figures come after factoring in retained working capital, as well as a capital distribution of $9.5 million.
Without the retention, CDLHT’s DPS would have been 12.4 per cent lower at 3.46 cents, compared with 3.95 cents for the year-ago period.
Revenue for the six-month period rose 5.8 per cent on the year to $138.3 million from $130.7 million, while net property income (NPI) grew 3.7 per cent to $75.5 million from $72.8 million previously.
The topline growth came on the back of improvements recorded throughout CDLHT’s portfolio, said its managers, save for lower NPI from Singapore and Perth.
They also noted positive momentum in revenue per available room (RevPAR) growth across all portfolio markets as global travel continued to recover in the second half of financial year 2023.
In the group’s core market of Singapore, RevPAR rose 3.5 per cent to $217 from $209 in the second half of financial year 2022, though the average occupancy rate fell 3.7 percentage points to 83.1 per cent.
Mr Vincent Yeo, chief executive of CDLHT’s managers, said Singapore’s hospitality sector “witnessed remarkable growth” in the first three quarters of 2023.
“In the final quarter, the pent-up demand that fuelled the industry’s resurgence began to normalise, in contrast to the fervour experienced in 2022.”
Inclusive of retained working capital and capital distribution for the full year, CDLHT’s financial year 2023 DPS stood at 5.7 cents, up 1.2 per cent from 5.63 cents in financial year 2022. Total distribution for the period was 1.8 per cent higher at $71 million.
Its managers also noted broad improvement in operational results over financial year 2023, coupled with RevPAR growth across all portfolio markets.
“The year 2023 was a challenging one where we were pleased to achieve growth amidst a difficult economy and an elevated interest-rate environment. The prospects for our portfolio hotels continue to be healthy while interest rates have shown signs of peaking,” Mr Yeo said.
Stapled securities of CDLHT closed two cents lower at $1.03 on Jan 30. THE BUSINESS TIMES
