NeraTel Cuts Dividend from Two Cents to One Cent

NeraTel Payment Terminal

NeraTel announces its 4Q2015 results on 24th February 2016. Profit after tax for the full year fell 17.4% from $16.2 million to $13.4 million. A final dividend of one cent was declared as compared to two cents a year ago.

NeraTel business comprises of two main segments. They are Telecommunications and Info-communications.

Telecommunications

Compared to FY 2014, turnover for FY 2015 declined 6.7% ($4.1 million) from $61.9 million to $57.8 million. The decrease was due to lower sales in the Middle East and Africa market.

Info-communications

Network Infrastructure

Compared to FY 2014, turnover for FY2015 declined 4.5% ($3.6 million) YOY from $80.6 million to $77.0 million. The decline in turnover for the quarter and FY2015 mainly resulted from lower sales of network equipment to the Service Provider market sector.

Payment Solutions

Compared to FY 2014, turnover for FY2015 increased 17.2% ($6.8 million) YOY from $39.9 million to $46.7 million as a result of higher contribution from terminal sales and leasing.

Dividends

With the final one cents dividend being declared, this brings the total dividend paid for 2015 to 3.5 cents.

Year 2010 2011 2012 2013 2014 2015
Total dividend (cents)  3  4  4  6  4  3.5
Earnings per share (cents)  3.02  3.73  5.36  6.48  4.48  3.7
Dividend payout ratio (%) 99  107  75 93  89  94.6

Again NeraTel’s dividend payout ratio near to 100%. Is this sustainable?

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)