9 Quick Things Investors Should Know About Frasers Hospitality Trust’s Latest Earnings

In late January, Frasers Hospitality Trust (SGX: ACV) released its first quarter earnings update for its fiscal year ending 30 September 2018 (FY2018). As a quick introduction, Frasers Hospitality Trust 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.

Here are nine things investors should know about Frasers Hospitality Trust’s latest results:

1. Gross revenue for the reporting quarter grew 4.8% year-on-year to S$41.5 million while net property income improved by 3.1% to S$31.4 million.

2. Yet, the trust’s distribution per stapled security (DPS) was down by 1.1% year-on-year to 1.3107 cents, mainly due to an increase in the number of outstanding stapled securities.

3. Based on Frasers Hospitality Trust’s annualized DPS of 5.24 cents (from its DPS of 1.3107 cents for the reporting quarter) and its closing unit price of S$0.77 as of 12 February 2018, the REIT has a distribution yield of 6.8%.

4. As of 31 December 2017, the trust’s gearing stood at 33%, which is a safe distance from the regulatory ceiling of 45%.

5. The REIT’s average occupancy rate for its Australia, Singapore, UK, Japan, and Malaysia portfolios were 86.9%, 82.1%, 84.6%, 80.1% and 74.9%, respectively, for the first quarter of FY2018.

6. All countries the trust has business interests in reported year-on-year growth in gross revenue, with the exception of UK where gross revenue declined by 1.1%.

7. The average daily rate (ADR) was up year-on-year for Australia and the UK, and down in the remaining four countries.

8. Renovation works for the Novotel Rockford Darling Harbour (now Novotel Sydney Darling Square) has been completed, and the REIT said in the earnings release that the property’s relaunch will be this month.

9. Here are some comments from the REIT on its outlook for its two key geographical markets, namely, Australia and Singapore:

“For January to November 2017, Tourism Australia reported an increase in international arrivals of 6.9% yoy, with Chinese visitors growing 12.2%.

Sydney’s hotel market is expected to strengthen, with continued strong demand bolstered by the opening of the International Convention Centre. Stable occupancy and anticipated increases in ADR are expected to push RevPAR up further.

While Melbourne continues to enjoy strong visitor growth, the market buoyancy of recent years is anticipated to moderate over the medium term as the city’s hotel development pipeline continues to build.

Singapore continues to grow its status as a leading MICE destination, with a line-up of prominent events for 2018 which include the biennial Singapore Airshow, Food&HotelAsia and World Cities Summit as well as the Dental Aesthetics Meeting in Asia and ITLM Asia Pacific.

The decline in Singapore’s hotel trading performance is expected to improve as the market is nearing the end of a protracted rise in new hotel supply. Continued visitor growth should provide a strong base for hotel demand.”

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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.