SINGAPORE (Feb 17): The managers of Eagle Hospitality Trust (EHT) has announced distribution per stapled security (DPS) of 1.179 US cents for 4QFY2019 ended December, falling a whopping 24.4% short of its initial public offering (IPO) forecast of 1.56 US cents.

On a fully diluted basis, this translated to a loss per share of 0.568 US cent for 4QFY2019.

Income available for distribution to stapled securityholders stood at US$10.3 million ($14.3 million) for the quarter, missing the IPO forecast by 24.3%.

Revenue for 4QFY2019 amounted to US$20.5 million, some 13.1% lower than forecast.

This was mainly due to less favourable US lodging market fundamentals, roof repairs at its largest asset, Holiday Inn Resort Orlando Suites, coupled with the impact by the ramp from the construction delays.

Consequently, net property income was 14.7% lower than forecast at US$14.7 million.

As at end December, cash and cash equivalents stood at US$26.7 million.

Net asset value and net tangible assets per stapled security stood at 89.27 US cents as at Dec 31, 2019.

In a separate filing to SGX on Monday, the managers announced that the sponsor of Eagle Hospitality Real Estate Investment Trust (EH-REIT), as master lessee, has agreed to amend the master lease agreements in favour of the stapled securityholders.

This amendment will allow EH-REIT to receive more rent from any outperforming properties that produce excess cash flow. 80% of the excess cash flow from outperforming properties is to be applied to the shortfalls in rent of any underperforming properties.

The managers say this amendment is non-prejudicial to stapled securityholders and could only result in additional rent for EH-REIT.

“We remain encouraged that the portfolio continues to outperform its competition despite temporary displacements; we are positioned for incremental market share gains from further ramp-up associated with the significant recent capital expenditures and numerous asset management initiatives,” says Salvatore Takoushian, president and chief executive officer of the managers.

EHT was in the spotlight last year, following concerns that one of its key assets, The Queen Mary Long Beach, might have sunk into disrepair.

According to the REIT’s latest notice of valuation, as of Dec 31, 2019, The Queen Mary – a decommissioned ocean liner that has now been converted into a 347-room upscale hotel in California – is valued at US$168.3 million.

This makes it the second-largest asset in EHT’s portfolio – just US$1.3 million shy of Holiday Inn Resort Orlando Suites.

Units in EHT closed half a US cent higher, or up 1.0%, at 53 US cents on Monday, before the results announcement. This is some 32% below its IPO price of 78 US cents in May last year.