Far East Hospitality Trust DPU Fall for 4Q 2015

FEHT Logo

Far East Hospitality Trust (“FEHT”) announces its 4Q2015 results on 24th February. Distribution Per Unit (“DPU”) for 4Q2015 fell 8.6% to 1.17. The annualised DPU fell 10.5% to 4.60 centsNet Property Income fell 4.9% as compared to 4Q2014.

Unless tourism picks up, I am expecting the hospitality sector to be soft and DPU to fall further for FEHT.

4Q2015
(S$’000)
4Q2014
(S$ ‘000)
YoY(%)
Gross Revenue 28,851 30,280 (4.7)
Net Property Income 26,289 27,652 (4.9)
Distributable Amount 20,649 22,858 (9.7)
Distribution Per Unit (“DPU”) (cents) 1.17 1.28 (8.6)
Annualised DPU (cents) 4.60 5.14 (10.5)

Occupancy

FEHT 4Q2015 Occupancy

Hotels

The revenue per available room (“RevPAR”) of the hotel portfolio fell 4.4% year-on-year to $146 in 4Q 2015, mainly due to a 7.6% year-on-year decrease in the average daily rate (“ADR”).

Serviced Residences

The revenue per available unit (“RevPAU”) was down by 13.5% year-on-year to $180 in 4Q 2015.

Things to Note

Bleak Tourism Outlook

International visitor arrivals to Singapore was fairly flat with a slight 0.4% increase year-on-year for the first eleven months of 2015.

Biennial and new MICE events in 2016

Hospitality sector may benefit from biennial and new MICE events in 2016. E.g. Singapore Airshow, World Rugby Sevens Series)

Summary of February 2016 Transactions

Portfolio_201602_Feb

The month of February, many companies continue to announce their FY2015 Full Year results. M1 held the fort well given the threat and market panic caused by the news of the 4th Telco.

I am expecting to collect dividends from the stocks I hold such as Soilbuild REIT, Suntec REIT, Parkway Life REIT, Keppel REIT, Frasers Commercial Trust, Capitaland Mall Trust, OUE Hospitality Trust and Cambridge Industrial Trust.

Given the market weakness, I bought a little more of ST Engineering. ST Engineering now stands at 15% of my entire portfolio. At the time of writing this post, ST Engineering has announced its FY15 results. Net profit dipped 0.5% YoY to $529m. Given the weak marine sector, I am not surprise at the results. The aerospace and electronics sector did well. I am still positive about ST Engineering in the long run, given its defensive and resilient nature.

Over the past few months, I have been taking opportunity of the market weakness and buying more of the stocks I hold rather than introducing new counters into my portfolio. My war chest is depleting fast. Going forward, I shall be buying less or even none to build up my war chest so as to wait for the next buying opportunity.

Book Review: The 100 Best Stocks to Buy in 2015

The 100 Best Stocks To Buy in 2015 I came across this book which is selling at a discount at Times Book store. Looking at a title, you can tell why it is selling at a discount. There is a newer copy “The 100 Best Stocks to Buy in 2016” but I shall be grabbing that later.

The stocks listed in this book are all US based stocks. I have always been keen to invest in the US stock market and thus I grabbed this book to understand more.

The authors (Peter Sander and Scott Bobo) classify the list of stocks into a few categories.

  • Conservative Growth
  • Aggressive Growth
  • Growth and Income

In each stock analysis, the authors indicated how many times the company raises dividend for the past 10 years. This is especially useful if you are an income investor. Current yield information was also provided.

The author also indicates the reasons to buy and reasons for caution so we can do our own evaluation on the risks.

In summary, you can use this as a reference book when investing in the US stock market.

A good reference book, I give it an average rating of 3 stars out of 5.

Rating_Average