CDLH-Trust – BT

CDL Hospitality Trusts Q3 income up 30% to $24.4m

CDL Hospitality Trusts (CDLHT) yesterday said that its third quarter distributable income rose 29.7 per cent to $24.4 million, from $18.8 million a year ago.

Distribution per unit for the three months ended Sept 30 was 2.93 cents, 24.2 per cent higher than the 2.36 cents reported for the corresponding period last year.

Net property income for Q3 rose 20.7 per cent to $27.3 million, from $22.6 million in Q3 2007.

CDLHT is a stapled group comprising a real estate investment trust (Reit) and a business trust.

In Q3 2008, the room revenue per available room (RevPAR) for the Reit’s Singapore hotels – Orchard Hotel, Grand Copthorne Waterfront Hotel, M Hotel, Copthorne King’s Hotel and Novotel Clarke Quay – rose to $214, from $176 a year ago. The Reit also owns one hotel in New Zealand – Rendezvous Hotel Auckland.

However, the average occupancy rate fell slightly by about four percentage points to 85.5 per cent as visitor arrivals to Singapore fell. But the Reit was still able to report better earnings as room rates were higher this year.

In particular, the Reit benefited from the strong performance of its hotels during the Formula One Grand Prix, when room rates were about twice the average rates.

‘We are pleased to have been able to report robust growth in this quarter on the base of organic growth across CDLHT’s portfolio of hotels despite turmoil in the global financial markets,’ said Vincent Yeo, chief executive of the Reit’s manager.

CDLHT’s debt-to-asset ratio rose to 19.3 per cent over Q3 of this year as total debt rose to $297 million. The trust has some $220 million of debt due for refinancing in July 2009. Refinancing has yet to be locked in, but the trust is in discussions with banks and chances of securing refinancing are good, said Mr Yeo.

Looking ahead over the short term, the events of the last few months will have some impact on CDLHT’s business, Mr Yeo said.

But the trust is still upbeat about the prospects of Singapore tourism in the future, citing high-profile events such as the Asia-Pacific Economic Cooperation (Apec) conferences in 2009 and the Youth Olympics in 2010 as well as the annual F1 event.

The trust is likely to see mainly organic growth in the short term, but 2009 could provide more opportunities for acquisitions, especially if distressed assets turn up on the market, Mr Yeo said.

CDLHT gained 0.5 cent to close at 59 cents yesterday. The stock has lost 74.9 per cent so far this year.