ACROPHYTE Hospitality Trust’s net property income (NPI) for the first nine months of FY2024 fell 4 per cent year on year to US$33.8 million, from US$35.2 million.
Revenue amounted to US$129.4 million, down 3.9 per cent from US$134.6 million in the same period last year.
Operating profit slid 4.9 per cent to US$46.3 million from US$48.7 million.
The declines were mainly due to the absence of contribution from divested properties and lower revenue contribution from hotels affected by asset enhancement initiatives (AEIs), said the trust’s managers in a business update on Thursday (Nov 7).
AEI projects at six hotels interrupted operational performance, said the managers. Four hotels have completed their works this year, but two others are still undergoing upgrades.
On a same-store basis and taking into account the impact of the AEI projects, revenue and NPI would have declined 1 and 3.2 per cent, respectively.
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From September 2023 to July this year, the trust disposed of three hotel assets – Hyatt Place Oklahoma City Airport, Hyatt Place Pittsburgh Airport and Hyatt House Plymouth Meeting.
Net proceeds from the transactions had been used to pare down bank borrowings. They will also be used to repay debt, fund future acquisitions or accretive AEIs at other hotels in the portfolio, said the managers.
As at end-September, Acrophyte Hospitality Trust’s aggregate leverage ratio stood at 43.2 per cent. Its weighted average debt to maturity was at 1.8 years. To date, 46.3 per cent of the trust’s loan portfolio is hedged to fixed rates.
Looking ahead, chief executive of the managers Lee Jin Yong is optimistic about the US lodging sector, amid stable rent growth, moderating inflation and lower interest rates.
“We are seeing a steady increase in business travel and strengthening group booking activity, both of which are expected to boost overall lodging demand,” he added.
Stapled securities of Acrophyte Hospitality Trust ended Wednesday flat at US$0.21.
