CDL Hospitality Trusts’ (CDLHT) net property income (NPI) for the first half ended Jun 30, 2024, rose 5.9 per cent to S$66.5 million, from S$62.9 million in the year-ago period.
On Tuesday (Jul 30), the managers of the stapled group reported an unchanged H1 distribution per stapled security (DPS) of S$0.0251, which was affected by higher interest costs.
Total distribution to stapled securityholders after retention was up 0.7 per cent year on year to S$31.4 million, from S$31.2 million. The distribution will be paid on Aug 30, after the closure of books on Aug 7.
The stapled group also reported a 6.8 per cent higher revenue of S$127.3 million, from S$119.2 million.
The managers noted that NPI increased in tandem with the rise in gross revenue, with the former posting an improvement in almost all of its portfolio markets.
However, NPI in its New Zealand market was down 13.9 per cent to S$3.1 million, from S$3.7 million in H1 FY2023.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
NPI in its UK market remained almost unchanged at S$6.2 million.
Interest costs for H1 FY2024 increased mainly due to higher funding costs on floating rate loans and interest rate expenses from additional amounts drawn.
Revenue per available room (RevPAR) growth was recorded across all of the group’s portfolio markets, even as pent-up demand post-pandemic tapered off in most markets.
The managers noted a 7.7 per cent increase in its Singapore hotels’ RevPAR to S$193, from S$179 in H1 FY2023. This comes as the average occupancy rate rose 9.2 percentage points to 78.4 per cent.
NPI for its Singapore portfolio increased 6.8 per cent to S$41.3 million in H1 FY2024.
The managers said that RevPAR for its Singapore portfolio – which represents a core market for the stapled group – was driven by an increase in occupancy.
First-quarter performance was boosted by Singapore’s concert calendar and the start of visa-free travel between China and Singapore.
However, this was weighed down in the second quarter by falling demand. This came after several weekday public holidays, an increase in hotel supply and the recent oil spill near Sentosa, among others.
Chief executive officer of CDLHT’s managers Vincent Yeo said: “As there is still a gap of visitor arrivals to pre-pandemic levels, there is still a runway for growth ahead.”
Among the stapled group’s various geographical segments, the Japan market recorded one of the more notable performances with 17.7 million visitors in H1 FY2024. This marks a 65.9 per cent year-on-year increase.
NPI in the Japan market also rose 24.1 per cent on the year to S$2.2 million, while RevPAR increased 25.4 per cent to 10,410 yen (S$90).
The managers expect positive trends in the country’s tourism sector to continue this year, supported by its appeal as a tourism destination and weaker currency.
They noted that international tourism is on its recovery path towards pre-Covid level as flights continue to be restored.
“Eventual widespread return of the Chinese visitors will be a key determinant of the recovery trajectory,” the managers added.
As at Jun 30, CDLHT’s gearing ratio was 37.7 per cent. It had a debt headroom of S$783.3 million, with cash reserves of S$64.9 million and S$648.5 million of credit facilities.
The group posted a weighted average cost of debt of 4.2 per cent and an interest coverage ratio of 2.66 times at the end of the first half of FY2024.
Yeo said: “With ample debt headroom, we will continue to rejuvenate our portfolio hotels to strengthen their positions in the marketplace for the medium to long term.”
Stapled securities of CDLHT closed at S$0.975 on Monday, up S$0.005 or 0.5 per cent.
