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OUE Hospitality Trust posts 6.6% drop in 4Q DPS to 1.27 cents on absence of income support, higher interest expense

Stanislaus Jude Chan
Stanislaus Jude Chan1/30/2018 05:53 PM GMT+08  • 2 min read
OUE Hospitality Trust posts 6.6% drop in 4Q DPS to 1.27 cents on absence of income support, higher interest expense
SINGAPORE (Jan 30): The manager of OUE Hospitality Trust (OUE H-Trust) has announced distribution per stapled security (DPS) of 1.27 cents for the 4Q ended December, a decline of 6.6% from DPS of 1.36 cents a year ago.
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SINGAPORE (Jan 30): The manager of OUE Hospitality Trust (OUE H-Trust) has announced distribution per stapled security (DPS) of 1.27 cents for the 4Q ended December, a decline of 6.6% from DPS of 1.36 cents a year ago.

This bring DPS for the full year to a record 5.14 cents, 11.5% higher than DPS of 4.61 cents a year ago.

The lower DPS in 4Q mainly due to the absence of income support for Crowne Plaza Changi Airport (CPCA) and higher interest expense. These were partially mitigated by higher income received from hospitality and retail segments.

Gross revenue grew 1.8% to $33.8 million in 4Q17, from $33.2 million a year ago, on the back of higher revenue from its hospitality segment, which includes master lease income from CPCA and Mandarin Orchard Singapore (MOS).

This was partially offset by a $0.1 million dip in revenue from its retail segment, which includes rental and other income from the Mandarin Gallery (MG) shopping mall.

Property expenses jumped 24.9% to $4.6 million in 4Q17, from $3.7 million a year ago.

This was mainly due to higher land rent payable to Changi Airport Group in line with improved operating performance in CPCA and higher property tax for MG.

Consequently, net property income (NPI) fell 1.1% to $29.2 million in 4Q17, from $29.6 million a year ago.

As at end December, cash and cash equivalents stood at $25.6 million.

“OUE H-Trust has done well for full year 2017 to record its highest annual DI (distributable income) since listing, against a backdrop of continued increase in supply of hotel rooms in Singapore and a challenging retail landscape,” says Chong Kee Hiong, CEO of the REIT manager.

For the full year in 2017, OUE H-Trust saw its distributable income rise 12.7% to $92.9 million, from $82.5 million a year ago.

Looking ahead, the manager says OUE H-Trust will continue to actively seek growth opportunities and yield accretive acquisitions from its sponsor and third parties.

Units of OUE H-Trust closed half a cent higher at 88.5 cents on Tuesday.

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