ART announced 3Q13 results that were ahead of ours and the street’s expectations. Revenue climbed 11% YoY to S$86.1m, chiefly due to additional revenue of S$14.1m from the properties acquired in second half last year and on 28 Jun 2013. The increase was partially offset by the decrease in revenue of S$4.7m from the divestment of Somerset Grand Cairnhill in Sep 2012 and lower contribution of S$0.7m from the existing properties, mainly properties in Philippines and Japan. The group achieved a RevPAU of S$133 in 3Q13, a decrease of 10% as compared to 3Q12. The decrease in RevPAU was mainly due to divestment of Somerset Grand Cairnhill Singapore and weaker performance from Philippines and Japan. Gross profit climbed 10% YoY to S$44.8m. Unitholders' distribution increased 17% YoY to S$30.0m. DPU rose 6% YoY to 2.37 S cents, bringing 9M13 DPU to 7.07 S cents, versus full year estimates of ours and the street of 8.9 S cents and 9.0 S cents respectively. Adjusting our assumptions, our FY13F DPU forecast increases from 8.9 S cents to 9.1 S cents and our FV increases to S$1.39 from S$1.37. We maintain our BUY rating on ART.
3Q13 beats expectations
ART announced 3Q13 results that were ahead of ours and the street’s expectations. Revenue climbed 11% YoY to S$86.1m, chiefly due to additional revenue of S$14.1m from the properties acquired in second half last year and on 28 Jun 2013. The increase was partially offset by the decrease in revenue of S$4.7m from the divestment of Somerset Grand Cairnhill in Sep 2012 and lower contribution of S$0.7m from the existing properties, mainly properties in Philippines (lower corporate demand and ongoing renovation of Ascott Makati) and Japan (due to the depreciation of the JPY against SGD). Gross profit climbed 10% YoY to S$44.8m, although on a same store basis gross profit fell S$0.9m YoY. Unitholders' distribution increased 17% YoY to S$30.0m. In 3Q12, unitholders' distribution included a S$2.0m reversal of over-provision of prior years' tax expense. Excluding this, YoY growth would be 27%. DPU rose 6% YoY to 2.37 S cents, bringing 9M13 DPU to 7.07 S cents, versus full year estimates of ours and the street of 8.9 S cents and 9.0 S cents respectively.
Weaker performance in Philippines and Japan
The group achieved a RevPAU of S$133 in 3Q13, a decrease of 10% as compared to 3Q12. The decrease in RevPAU was mainly due to divestment of Somerset Grand Cairnhill Singapore and weaker performance from Philippines and Japan (due to depreciation of the JPY).
AEIs progressing according to plan
The first phase of refurbishments at Citadines Toison d’Or Brussels and Somerset Xu Hui Shanghai have been completed as at end 3Q13. Citadines Ramblas Barcelona, Ascott Jakarta, Ascott Makati Philippines, Somerset St Georges Terrace Perth and Citadines Toison d’Or Brussels (Phase two) are undergoing refurbishment.
Maintain BUY
Adjusting our assumptions, our FY13F DPU forecast increases from 8.9 S cents to 9.1 S cents and our FV increases to S$1.39 from S$1.37. We maintain our BUY rating on ART.
ART announced 3Q13 results that were ahead of ours and the street’s expectations. Revenue climbed 11% YoY to S$86.1m, chiefly due to additional revenue of S$14.1m from the properties acquired in second half last year and on 28 Jun 2013. The increase was partially offset by the decrease in revenue of S$4.7m from the divestment of Somerset Grand Cairnhill in Sep 2012 and lower contribution of S$0.7m from the existing properties, mainly properties in Philippines (lower corporate demand and ongoing renovation of Ascott Makati) and Japan (due to the depreciation of the JPY against SGD). Gross profit climbed 10% YoY to S$44.8m, although on a same store basis gross profit fell S$0.9m YoY. Unitholders' distribution increased 17% YoY to S$30.0m. In 3Q12, unitholders' distribution included a S$2.0m reversal of over-provision of prior years' tax expense. Excluding this, YoY growth would be 27%. DPU rose 6% YoY to 2.37 S cents, bringing 9M13 DPU to 7.07 S cents, versus full year estimates of ours and the street of 8.9 S cents and 9.0 S cents respectively.
Weaker performance in Philippines and Japan
The group achieved a RevPAU of S$133 in 3Q13, a decrease of 10% as compared to 3Q12. The decrease in RevPAU was mainly due to divestment of Somerset Grand Cairnhill Singapore and weaker performance from Philippines and Japan (due to depreciation of the JPY).
AEIs progressing according to plan
The first phase of refurbishments at Citadines Toison d’Or Brussels and Somerset Xu Hui Shanghai have been completed as at end 3Q13. Citadines Ramblas Barcelona, Ascott Jakarta, Ascott Makati Philippines, Somerset St Georges Terrace Perth and Citadines Toison d’Or Brussels (Phase two) are undergoing refurbishment.
Maintain BUY
Adjusting our assumptions, our FY13F DPU forecast increases from 8.9 S cents to 9.1 S cents and our FV increases to S$1.39 from S$1.37. We maintain our BUY rating on ART.
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