FRASERS Hospitality Trust : ACV 0% (FHT) recorded a 13.7 per cent fall in distribution per stapled security (DPS) to S$0.01091 for its first half year ended Mar 31, 2024, from S$0.012649 in the corresponding year-ago period.
Gross revenue for H1 grew 1.7 per cent to S$63.3 million from S$62.2 million. This followed a slight improvement in FHT’s hospitality portfolio performance due to travel recovery in most of its operating markets, said its managers on Thursday (May 9).
Additionally, the managers noted that from Mar 1, FHT assumed the economic interest of Koto no Hako Kobe, the retail component of ANA Crowne Plaza Kobe. The property has a net lettable area of 22,431 square metres with a committed occupancy of 60.7 per cent.
Net property income (NPI) was down 1.3 per cent at S$44.7 million from S$45.2 million.
Income available for distribution declined 13.7 per cent to S$23.4 million, from S$27.1million.
This came as the trust incurred higher finance costs. It refinanced its borrowings that matured in FY2023, amid a higher interest-rate environment, its managers said.
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The distribution will be paid on Jun 28, after the record date on May 17.
In Singapore, while FHT’s portfolio average daily rate (ADR) grew 3.4 per cent year on year, occupancy fell 7.5 percentage points. Overall, revenue per available room (RevPAR) declined 6.7 per cent from a year ago.
The managers noted that the demand that supported Fraser Suites Singapore’s strong performance in H1 FY2023 began to normalise in H1 FY2024, due to the easing of relocation demand and a slowdown in the long-stay market, impacted by a decline in the average length of stay.
“Despite an increase in tourism arrivals, a strong Singapore dollar caused Singapore to become a relatively more expensive destination for business and leisure, impacting price sensitive segments,” said the managers.
FHT’s Singapore portfolio gross operating revenue declined 4.4 per cent year on year and gross operating profit dropped 20.6 per cent, which the managers attributed to higher operating costs.
While the stapled group’s UK portfolio recorded a 4.4 per cent year-on-year decline in H1 RevPAR, weighed down by a dip in ADR, there were improvements across its Australia, Japan, Malaysia and Germany properties, following recovery in travel demand.
As at Mar 31, FHT’s gearing stood at 35.5 per cent, and its weighted average debt to maturity was 2.08 years. The trust has S$127 million in loans due for refinancing in FY2024, or 16.8 per cent of its total gross borrowings.
The managers said FHT has “ample headroom and adequate liquidity” to meet its operational needs and financial commitments.
FHT is a stapled group comprising Frasers Hospitality Reit and Frasers Hospitality Business Trust.
Stapled securities of FHT closed flat at S$0.46 on Wednesday.
