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3 Things Investors Should Know From Frasers Hospitality Trust’s Latest Earnings Presentation

Frasers Hospitality Trust (SGX: ACV) is a stapled trust that comprises a real estate investment trust and business trust. It focuses mainly on hotels and serviced residences around the world. Right now, its portfolio consists of 15 properties located across nine cities in Asia, Australia, and Europe.

Last Friday, the REIT reported its earnings for the fourth quarter of its fiscal year ended 30 September 2017 (FY2017). Frasers Hospitality Trust had prepared a presentation for its earnings announcement. Within the deck of slides are three that contain key information about the trust’s business that I think investors should see. Here are the crucial information from the slides.

A summary of the results

The table below shows important items from the income statement of the trust’s reporting quarter:


Source: Frasers Hospitality Trust FY2017 fourth quarter earnings presentation

As you can see, there was strong revenue growth, which led to high single-digit growth in net property income, distribution income, and distribution per stapled security.

Frasers Hospitality Trust had benefitted from the addition of Novotel Melbourne on Collins (the trust acquired the property in late 2016), and stronger performances in most geographies, except for Singapore and Japan.

Portfolio performance by country

In the table below, you can see how Frasers Hospitality Trust had performed in each of its geographical markets in the fourth quarter of FY2017:


Source: Frasers Hospitality Trust FY2017 fourth quarter earnings presentation

As mentioned earlier, most of the trust’s geographical markets had experienced growth, with the exception of Singapore and Japan.

A lower daily average rate at Fraser Suites Singapore led to Frasers Hospitality Trust’s poorer performance in Singapore. Japan, on the other hand, suffered from lower banquet revenue at ANA Crown Plaza Kobe.

Income contribution by country

Here’s a chart showing the geographical breakdown of Frasers Hospitality Trust’s gross revenue and net property income in the fourth quarter of FY2017:


Source: Frasers Hospitality Trust FY2017 fourth quarter earnings presentation

We can see that Frasers Hospitality Trust is reasonably well-diversified in terms of geography, with Australia – the largest market – making up just 44% and 38% of gross revenue and net property income, respectively.

The benefit of such diversification is that the trust is not relying on one single country for the majority its income, which reduces concentration risk.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.