SINGAPORE (Apr 26): The managers of Frasers Hospitality Trust (FHT) have declared a distribution per stapled security (DPS) of 1.1126 cents for the second quarter ended Mar 2018, down 7.8% from its DPS of 1.2063 cents a year ago on weaker overall portfolio performance, save for its Japan and Singapore properties.

The latest quarter’s results brings FHT’s DPS for 2H18 to 2.4233 cents, which is 4.3% lower than its half-year DPS of 2.5321 cents previously.

Gross revenue for 2Q18 came in at $37.5 million, down 3.1% from $38.7 million a year ago mainly as the Australia portfolio turned in weaker performance due to a more competitive trading environment in Sydney, as well as Novotel Sydney Darling Square’s renovation which was completed in end Jan 2018.

Further, FHT’s UK and Malaysia portfolios also saw a softer trading performance which was attributed to weaker corporate demand, with adverse winter weather conditions also affecting leisure demand in the UK.

FHT’s manager says the Singapore portfolio recorded stable gross operating profit (GOP) performance in 2Q18 despite a 2.9% decline in gross operating revenue (GOR) y-o-y.

In particular, InterContinental Singapore achieved higher RevPAR on the back of healthy ADR gains, although the portfolio RevPAR was 4.1% lower on-year due to lower ADR and occupancy at Fraser Suites Singapore.

Due to softer room and banquet performance, the GOR of ANA Crowne Plaza Kobe in Japan was 3.2% lower yoy. However, its GOP was 3.5% higher yoy on the back of tighter cost controls to drive higher efficiency, particularly in the F&B areas.

Overall net property income (NPI) consequently fell 4% to $27.8 million from $28.9 million a year ago, contributing to a 6.5% fall in income available for distribution to $20.9% from $22.3 million in 2Q17.

"This quarter, our Sydney properties face a more competitive landscape due to softer corporate demand. Post-renovation, Novotel Sydney Darling Square is expected to ramp up its performance in the next few months, says Eu Chin Fen, CEO of the managers.

“We remain confident of the quality of our assets and will continue to work closely with the respective operators to drive performance. With our debt headroom and the strength of our balance sheet, we will continue to actively pursue acquisition opportunities to support our earnings growth and create value for our stapled securityholders,” she adds.

Units in FHT closed 1 cent lower at 75 cents on Wednesday.