My Notes from OUE Hospitality Trust Annual Report 2016

OUE Hospitality Trust 1Q2017 Results – Signs of Recovery?

OUE Hospitality Trust Logo

Recently, I noticed the share price of OUE Hospitality Trust has gone up slight by a bit. It even broke above $0.70 on 5th April 2017. While research reports published by analyst says that hospitality sector is improving and the worst may be over for 2017, I still have doubts. Since OUE Hospitality Trust makes up 5% of my current stock portfolio, I decided to take a brief look at its 1Q2017 financial results.

OUE Hospitality Trust 1Q2017 Results - Signs of Recovery?

Below are some notes I took from the OUE Hospitality Trust 1Q2017 financial results presentation.

  • Master lease income from Mandarin Orchard Singapore decreased by $0.6 million but it was offset by $1.6 million higher master lease income from CPCA (“Crowne Plaza Changi Airport”).
  • RevPAR for MOS (“Mandarin Orchard Singapore”) was lower at $217 in 1Q2017 as compared to $222 in 1Q2016.
  • Retail revenue at Mandarin Gallery was $1.0 million higher than 1Q2016 due to higher average occupancy rate of 94.7% for 1Q2017 as compared to 82.9% in 1Q2016.
  • Mandarin Gallery record a lower effective rent of $23.7 per square foot per month for 1Q2017 as compared to $24.4 per square foot per month in 1Q2016.

Summary

From the lower RevPAR and lower effective rent, I think that the hospitality sector outlook remains bleak. Although DPS (“Distribution Per Share”) was higher at 1.30 ┬ácents in 1Q2017 as compared to 1.10 cents in 1Q2016, this was because of the income support received for CPCA (“Crowne Plaza Changi Airport”) and lower interest expense.

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