[SINGAPORE] Frasers Hospitality Trust (FHT) on Tuesday (May 6) posted a 6 per cent drop in distribution per stapled security (DPS) to S$0.010257 for its first half year ended Mar 31, from S$0.01091 in the corresponding year-ago period.
The decline was attributed to lower net property income (NPI) and higher finance costs arising from the refinancing of borrowings in a higher interest rate environment.
NPI for the period fell 2.5 per cent on the year to S$43.5 million from S$44.7million, while revenue rose 0.9 per cent to S$63.8 million from S$63.3 million in H1 FY2024.
The higher revenue was supported by increased contributions from Koto no Hako, the retail component of ANA Crowne Plaza Kobe, and higher other income.
However, the managers of the stapled group noted that it was “largely offset by the absence of one-off income adjustments that had boosted performance” in H1 FY2024.
The revenue per available room (RevPAR) of ANA Crowne Plaza Kobe improved by 17.6 per cent year-on-year. This was driven by a 11.3 percentage point increase in occupancy, supported by robust domestic demand and sustained growth in international tourism. This is in addition to a favourable exchange rate.
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Income available for distribution fell 6.1 per cent to S$21.9 million from S$23.4 million in the same year-ago period.
The distribution will be paid on Jun 27, after the record date on May 15.
In Singapore, RevPAR for H1 FY2025 declined by 1.8 per cent year-on-year, as an 8.2 per cent year-on-year decrease in average daily rate (ADR) was partially offset by a 4.8 percentage point increase in occupancy.
The softer ADR was mainly attributed to weaker performance in the transient segment, which refers to travellers who book individual stays, often for shorter periods, without being part of a larger group or corporate agreement, particularly in Q2 FY2025.
The managers of the stapled group note that the decline was most pronounced in March due to a high base effect from major concert events in the same period last year.
Despite lower rooms revenue, gross operating revenue rose by 2 per cent year-on-year, supported by stronger food and beverage performance at InterContinental Singapore. FHT’s gross operating profit for the Singapore portfolio also increased by 3.1 per cent year-on-year.
The stapled group’s gearing stood at 34.8 per cent as at Mar 31, with a weighted average debt maturity of 2.7 years. Its interest coverage ratio was at three times.
The effective cost of borrowing rose to 3.6 per cent for the period, from 3.4 per cent as at Mar 31, 2024, due to refinancing at higher interest rates.
Eric Gan, chief executive officer of the managers of the stapled group, said: “While cost pressures persist and the market environment remains challenging, performances across our portfolio remained relatively stable… The addition of Koto no Hako also further strengthened our income base.”
He added that FHT’s priorities remain anchored on prudent capital management, operational efficiency and sustainability, amid ongoing macroeconomic uncertainties and geopolitical tensions, as it positions its portfolio to benefit from the gradual recovery in global tourism.
FHT is a stapled group comprising Frasers Hospitality Reit and Frasers Hospitality Business Trust.
Stapled securities of FHT closed S$0.01 or 1.5 per cent lower at S$0.65 on Monday.
