Far East Hospitality Trust DPS drops 30.7% to 1.38 S cents for H2

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FAR East Hospitality Trust’s (Far East H-Trust) distribution per stapled security (DPS) fell 30.7 per cent to 1.38 Singapore cents for the half year ended Dec 31, 2020 compared to 1.99 cents for the year-ago period.

Gross revenue for the half-year period was S$39 million, 34.8 per cent lower than a year ago at S$59.8 million. The manager attributed the fall in revenue to lower rentals in its hotel arm, as well as rental rebates and lower occupancy for its offices. 

Net property income eased 38 per cent to S$33.6 million for H2 2020 compared to S$54.1 million for H2 2019.

Total distributable income for the half year dipped 29.5 per cent year on year to S$27.5 million from S$38.9 million the previous year.

The distribution will be paid out on March 22 after book closure on Feb 22.

Meanwhile, the trust’s full-year DPS was 2.41 cents, 36.7 per cent lower from 3.81 cents last year. Total distributable income for the year slipped 35.2 per cent to S$47.9 million from S$73.9 million for 2019.

The manager said that the trust’s earnings were largely affected by the fall in inbound travel due to Covid-19. This was however mitigated by high fixed rentals of the master leases, which made up 77 per cent of its gross revenue for FY2020, since all 20-year master leases on hotels and serviced residences were supported by the sponsor, Far East Organization, they added.

In the long term, the manager was optimistic of a gradual recovery trajectory on the back of vaccine roll-outs, along with government support and measures such as the Job Support Scheme and SingapoRediscovers vouchers to help revive the hospitality sector.

“Singapore is well-positioned to bounce back as a hub for corporate travel with strong foreign direct investment commitments,” the manager said. 

Units of the stapled security closed down one Singapore cent, or 1.7 per cent at 57.5 cents on Wednesday.

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