Ascott Reit’s 4Q 2018 distribution per unit increases 5% to 2.15 cents

Unitholders’ distribution for FY 2018 is a record high at S$154.8 million, a 2% increase from FY 2017. This was on the back of 4Q 2018 Unitholders’ distribution rising 6% to S$46.5 million over 4Q 2017.

Gross profit for 4Q 2018 increased 3% to S$63.4 million due to higher revenue. Revenue grew 2% to S$136.5 million. This was mainly contributed by the additional revenue of S$0.4 million from Ascott Orchard Singapore acquired in October 2017 and higher revenue of S$2.7 million from existing properties, partially offset by the decrease in revenue of S$1.1 million from divestments¹. On a same-store basis, gross profit and revenue also increased. Ascott Reit’s revenue per available unit (RevPAU) for 4Q 2018 increased 5% year-on-year to S$163.

Mr Bob Tan, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said: “Ascott Reit achieved record high Unitholders’ distribution for the third consecutive year. Ascott Reit’s ability to deliver stable returns is a result of our efforts in building a geographically diversified portfolio of quality properties. We continued to strengthen Ascott Reit’s position as the largest hospitality REIT in Singapore by acquiring a prime site to build lyf one-north Singapore, our first coliving property.”

The International Monetary Fund has revised its global economic growth forecast from 3.7% to 3.5%³ for 2019. The modest growth stems from economic uncertainties arising from trade tensions, uncertainties about Brexit and tighter financial markets. As for the hospitality industry, the number of international travellers is expected to increase by 6%⁴ in 2019. However, competition arising from new supply and higher operating costs may remain a challenge. With a well-diversified portfolio spanning over 14 countries and no earnings concentration risk in any single market, Ascott Reit remains resilient in providing stable returns to its Unitholders.

Ms Beh added: “While there are mixed views regarding further interest rate hikes in 2019, any possible increase is not expected to have any significant impact to Ascott Reit’s total returns. We maintain a disciplined and prudent approach towards capital management, with 80% of Ascott Reit’s total borrowings on fixed interest rates and a well-spread debt maturity where less than 5% of debt will mature in 2019. Ascott Reit’s gearing stands at a healthy 36.7%. We will continue to monitor and manage its interest rate and exchange rate exposure.”

Ascott Reit’s ‘BBB’ investment grade status by Fitch Ratings provides credit assurance to stakeholders, enabling Ascott Reit to raise funds at attractive rates and terms.

For 2018, Ascott Reit’s earnings before interest, taxes, depreciation and amortisation (EBITDA) breakdown (excluding corporate expenses) according to the FTSE classification of markets is 75% for developed markets.

Summary of Results

4Q 2018 vs. 4Q 2017

• Revenue for 4Q 2018 grew 2% year-on-year to S$136.5 million. This was mainly contributed by the additional revenue of S$0.4 million from Ascott Orchard Singapore acquired in October 2017 and higher revenue of S$2.7 million from existing properties, partially offset by the decrease in revenue of S$1.1 million from the divestment of Citadines Biyun Shanghai and Citadines Gaoxin Xi’an.
• In 4Q 2018, gross profit increased 3% to S$63.4 million due to higher revenue.
• Unitholders’ distribution for 4Q 2018 rose 6% to S$46.5 million.
• DPU for 4Q 2018 was 2.15 cents, an increase of 5% year-on-year.
• RevPAU for 4Q 2018 grew 5% to S$163 over 4Q 2017.

FY 2018 vs. FY 2017

• Revenue for FY 2018 grew 4% year-on-year to S$514.3 million. This was mainly due to additional contribution of S$25.8 million from acquisitions made in 2017 and increase in revenue of S$2.4 million from existing properties, partially offset by the decrease in revenue of S$10.2 million from the divestments of 18 rental housing properties in Tokyo, Japan, and Citadines Biyun Shanghai and Citadines Gaoxin Xi’an in China.
• FY 2018 gross profit increased 5% to S$239.4 million due to higher revenue, mainly due to contribution from acquisitions made in 2017 and higher contribution from existing properties.
• Unitholders’ distribution for FY 2018 increased by 2% to S$154.8 million, a record year for Ascott Reit.
• DPU for FY 2018 notched up 1% to 7.16 cents.
• RevPAU for FY 2018 grew 5% to S$151 over FY 2017.

Distribution and Book Closure Date

Ascott Reit’s distributions are made on a semi-annual basis, with the amount calculated as at 30 June and 31 December each year.

For Ascott Reit’s FY 2018 financial statement and presentation, please visit www.ascottreit.com.

[1] Ascott Reit completed the divestment of Citadines Biyun Shanghai and Citadines Gaoxin Xi’an in China on 5 January 2018.

[2] Based on gross profit in local currencies.

[3] “World Economic Outlook Update, January 2019: A Weakening Global Expansion” (21 January 2019), International Monetary Fund.

[4] “International tourism continues its success story with solid growth” (3 December 2018), World Travel Monitor® by IPK International.

[5] Unitholders’ distribution for 4Q 2018 and 4Q 2017 included a one-off partial distribution of gain of S$6.5 million from the divestment of Citadines Biyun Shanghai and Citadines Gaoxin Xi’an.

[6] Unitholders’ distribution for YTD Dec 2018 included a realised exchange gain of S$1.6 million arising from the repayment of foreign currency bank loans with proceeds from the divestment of the two properties in China, and the partial distribution of divestment gain.

[7] Unitholders’ distribution for YTD Dec 2017 included a realised exchange gain of S$11.9 million arising from the repayment of foreign currency bank loans with proceeds from the rights issue (pending the deployment of the funds for their intended use to part finance the acquisition of Ascott Orchard Singapore) and divestment of 18 rental housing properties in Tokyo, Japan, and the partial distribution of divestment gains.