On 27th April 2016, Far East Hospitality Trust announces its 1Q2016 financial results. Gross revenue remains flat at S$27.4 million. Net property income increase slightly by 0.8% from S$24.5 million to S$24.7 million. A Distribution Per Unit (“DPU”) of 1.08 cents was declared which is a 0.9% increase as compared to 1.07 cents in 1Q2015.
The slight 1.9% increase in distribution amount was due to the slight increase in tourist arrivals in the first two months of the year.
| 1Q2016 (S$’000) | 1Q2015 (S$’000) | YoY(%) | |
| Gross Revenue | 27,365 | 27,365 | 0 |
| Net Property Income | 24,679 | 24,487 | 0.8 |
| Distributable Amount | 19,444 | 19,203 | 1.3 |
| Distribution Per Unit (“DPU”) (cents) | 1.08 | 1.07 | 0.9 |
Occupancy
Hotels
Singapore held the biennial Singapore Airshow earlier this year which provided some uplift. However, the hospitality sector still appears weak due to lack of corporate demand. Revenue per available room (“RevPAR”) was flat at S$141.
Serviced Residences
Revenue per available room (“RevPAR”) for serviced residences fell 8.7% to S$188. This was due to weaker demand as well.
Debt Maturity Profile
$50 million of Far East H-Trust’s floating-rate debt was hedged, increasing the proportion of debt secured at fixed interest rates to 65% from 59%. The current weighted average debt to maturity is 3 years.
Catalyst
Personally, my opinion for the catalyst of Far East Hospitality Trust will be the increase in international visitor arrivals. More international events held in Singapore can boost international visitor arrivals.
That’s a pretty good hold up for FEHT.
Think the bottom and pessimistic have been priced in so far…
Hi B, personally felt the hospitality sector remains weak although FEHT manage to achieve higher DPU.