4Q13 results for Global Premium Hotels (GPH) were in-line with our expectations. Total revenue fell 1.4% YoY to S$15.0m and gross profit rose 0.9% to S$13.2m. Net profit climbed 20.1% to S$5.2m. FY13 revenue and EPS came to 100% and 105% of our prior respective full-year estimates. Under other comprehensive income, GPH saw revaluation gain of land and hotel buildings of S$259.5m. This helped to boost NAV to 64.0 S cents as of end-Dec from 39.6 S cents as of end-Sep. We understand that recent transactions in the industry drove these revaluations. We maintain our FV of S$0.33 and BUY rating on GPH. The opening of the second Parc Sovereign hotel in 1H14 should lead to a significant earnings boost from 2H14.
4Q13 results as expected
4Q13 results for Global Premium Hotels (GPH) were in-line with our expectations. Total revenue fell 1.4% YoY to S$15.0m and gross profit rose 0.9% to S$13.2m. Administrative expenses contracted by 4.5% YoY to S$5.3m. Finance costs declined 9.4% to S$2.1m due to partial repayment of term loans and lower average interest rate. 4Q13 net profit climbed 20.1% to S$5.2m. FY13 revenue and EPS came to 100% and 105% of our prior respective full-year estimates. Under other comprehensive income, GPH saw revaluation gain of land and hotel buildings of S$259.5m. This helped to boost NAV to 64.0 S cents as of end-Dec from 39.6 S cents as of end-Sep. We understand that recent transactions in the industry drove the revaluations.
RevPAR more resilient than subsector’s
4Q13 hotel room revenue fell by S$0.2m or 1.2% YoY to S$14.7m. The decline was due to: (1) S$0.1m lower revenue contribution from Fragrance Hotel – Elegance, which ceased operation following the expiry of its tenancy agreement on 25 Nov 2013 (GPH operated but did not own this hotel), and (2) S$0.6m lower revenue recognised from the remaining hotels. The decrease was partially offset by S$0.5m in higher revenue from Fragrance Hotel-Ruby following asset enhancement works. GPH’s average occupancy rate decreased 3.1 ppt YoY to 88.3% and RevPAR decreased by 5.3% YoY to S$92.3. GPH's operational performance figures continue to be significantly better than its peer group's. Singapore hotels in the Economy category saw RevPAR in Oct, Nov and Dec 2013 fall by 11.1% and 18.7% and 15.9% respectively on a YoY basis, according to the STB. GPH management expects 2014 to remain a challenging year for the local hospitality industry given the expanding hotel room supply and uncertainties in the global economy.
Maintain BUY
We maintain our FV of S$0.33 and BUY rating on GPH. The opening of the second Parc Sovereign hotel in 1H14 should lead to a significant earnings boost from 2H14.
4Q13 results for Global Premium Hotels (GPH) were in-line with our expectations. Total revenue fell 1.4% YoY to S$15.0m and gross profit rose 0.9% to S$13.2m. Administrative expenses contracted by 4.5% YoY to S$5.3m. Finance costs declined 9.4% to S$2.1m due to partial repayment of term loans and lower average interest rate. 4Q13 net profit climbed 20.1% to S$5.2m. FY13 revenue and EPS came to 100% and 105% of our prior respective full-year estimates. Under other comprehensive income, GPH saw revaluation gain of land and hotel buildings of S$259.5m. This helped to boost NAV to 64.0 S cents as of end-Dec from 39.6 S cents as of end-Sep. We understand that recent transactions in the industry drove the revaluations.
RevPAR more resilient than subsector’s
4Q13 hotel room revenue fell by S$0.2m or 1.2% YoY to S$14.7m. The decline was due to: (1) S$0.1m lower revenue contribution from Fragrance Hotel – Elegance, which ceased operation following the expiry of its tenancy agreement on 25 Nov 2013 (GPH operated but did not own this hotel), and (2) S$0.6m lower revenue recognised from the remaining hotels. The decrease was partially offset by S$0.5m in higher revenue from Fragrance Hotel-Ruby following asset enhancement works. GPH’s average occupancy rate decreased 3.1 ppt YoY to 88.3% and RevPAR decreased by 5.3% YoY to S$92.3. GPH's operational performance figures continue to be significantly better than its peer group's. Singapore hotels in the Economy category saw RevPAR in Oct, Nov and Dec 2013 fall by 11.1% and 18.7% and 15.9% respectively on a YoY basis, according to the STB. GPH management expects 2014 to remain a challenging year for the local hospitality industry given the expanding hotel room supply and uncertainties in the global economy.
Maintain BUY
We maintain our FV of S$0.33 and BUY rating on GPH. The opening of the second Parc Sovereign hotel in 1H14 should lead to a significant earnings boost from 2H14.
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