CDL Hospitality Trusts (CDLHT) reported 4Q13 results that were generally in line with ours and the street’s expectations. 4Q13 revenue rose by 2.8% YoY to S$39.4m and net property income climbed 2.5% to S$36.4m. 4Q13 DPU is 2.92 S cents (up 0.7% YoY), bringing FY13 DPU to 10.97 S cents. While contributions from the Singapore and Australian hotels continued to be weak, Angsana Velavaru boosted the results, with a recognition of S$5.0m (inclusive of a 11 months variable rent of S$3.0m). Adjusting our estimates, including using a higher cost of equity of 8.7% (versus 7.7% previously), our FV declines to S$1.65 from S$1.84 and we downgrade CDLHT from Buy to HOLD on valuation grounds.
SG RevPAR for 4Q13 falls 6% YoY
CDL Hospitality Trusts (CDLHT) reported 4Q13 results that were generally in-line with ours and the street’s expectations. 4Q13 revenue rose by 2.8% YoY to S$39.4m and net property income climbed 2.5% to S$36.4m. 4Q13 DPU is 2.92 S cents (up 0.7% YoY), bringing FY13 DPU to 10.97 S cents.
RevPAR for CDLHT’s Singapore hotels in 4Q13 had declined 6.0% YoY, driven by a 4.0% drop in average room rate due to the increased room supply in the sector and weakness in corporate travel budgets. Average occupancy fell 1.9 ppt to 87.0%. CDLHT clocked average an RevPAR decline of 6.8% for its Singapore hotels in FY13. For the first 26 days of Jan 2014, RevPAR for CDLHT’s Singapore hotels declined by 0.3% YoY, in-line with our expectations for fairly flat RevPAR change for the industry in 2014. As part of the major AEI announced in May 2013, tenants of Orchard Hotel Shopping Arcade have progressively left the mall in 4Q13. Refurbishment began in Dec 2013. Gross revenue contribution from the property thus declined S$0.4m. Completing the AEI, OHSA will be renamed Claymore Link, which is envisioned as a family-friendly mall. Continued softness in the Australian dollar led to a smaller fixed rent contribution by the Australian hotels in 4Q13.
4Q13 sees boost from Maldives
Gross revenue climbed despite the above because of the Maldivian resort Angsana Velavaru, which was acquired in Jan 2013. From this property CDLHT recognised revenue of S$5.0m (inclusive of a 11 months variable rent of S$3.0m (or US$2.5m) contribution). RevPAR for the property for 4Q13 was up 21.1% YoY. CDLHT completed the acquisition of another Maldivian resort, Jumeirah Dhevanafushi, on 31 Dec 2013 and full year contributions will be seen in 2014.
Downgrade to HOLD
Adjusting our estimates, including using a higher cost of equity of 8.7% (versus 7.7% previously), our FV declines to S$1.65 from S$1.84 and we downgrade CDLHT from Buy to HOLD on valuation grounds.
CDL Hospitality Trusts (CDLHT) reported 4Q13 results that were generally in-line with ours and the street’s expectations. 4Q13 revenue rose by 2.8% YoY to S$39.4m and net property income climbed 2.5% to S$36.4m. 4Q13 DPU is 2.92 S cents (up 0.7% YoY), bringing FY13 DPU to 10.97 S cents.
RevPAR for CDLHT’s Singapore hotels in 4Q13 had declined 6.0% YoY, driven by a 4.0% drop in average room rate due to the increased room supply in the sector and weakness in corporate travel budgets. Average occupancy fell 1.9 ppt to 87.0%. CDLHT clocked average an RevPAR decline of 6.8% for its Singapore hotels in FY13. For the first 26 days of Jan 2014, RevPAR for CDLHT’s Singapore hotels declined by 0.3% YoY, in-line with our expectations for fairly flat RevPAR change for the industry in 2014. As part of the major AEI announced in May 2013, tenants of Orchard Hotel Shopping Arcade have progressively left the mall in 4Q13. Refurbishment began in Dec 2013. Gross revenue contribution from the property thus declined S$0.4m. Completing the AEI, OHSA will be renamed Claymore Link, which is envisioned as a family-friendly mall. Continued softness in the Australian dollar led to a smaller fixed rent contribution by the Australian hotels in 4Q13.
4Q13 sees boost from Maldives
Gross revenue climbed despite the above because of the Maldivian resort Angsana Velavaru, which was acquired in Jan 2013. From this property CDLHT recognised revenue of S$5.0m (inclusive of a 11 months variable rent of S$3.0m (or US$2.5m) contribution). RevPAR for the property for 4Q13 was up 21.1% YoY. CDLHT completed the acquisition of another Maldivian resort, Jumeirah Dhevanafushi, on 31 Dec 2013 and full year contributions will be seen in 2014.
Downgrade to HOLD
Adjusting our estimates, including using a higher cost of equity of 8.7% (versus 7.7% previously), our FV declines to S$1.65 from S$1.84 and we downgrade CDLHT from Buy to HOLD on valuation grounds.
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