CapitaLand Ascott Trust (HMN) H1 2023 earnings summary

Executive summary

• 1H 2023 revenue rose 30% YoY to S$346.9m and gross profit increased 31% to S$154.4m, supported by lodging recovery and acquired properties.

• Total return was S$69.0m versus S$38.9m in 1H 2022; growth income contributed 42% of gross profit, while stable income sources contributed 58%.

• Total distribution increased 26% to S$96.3m; DPS rose 19% to 2.78 cents and adjusted DPS increased 37% to 2.44 cents.

Financial highlights

• Net income was S$94.0m versus S$50.4m; total return before tax was S$82.5m versus S$51.2m.

• Same-store revenue and gross profit increased 26% and 25% YoY; excluding new properties, gross profit grew 25%.

• Portfolio RevPAU rose 44% YoY to S$138 per day in 1H; 2Q RevPAU rose 20% to S$149, reaching 98% of pro forma 2Q 2019 levels.

• Basic EPS was 1.73 cents versus 0.92 cents; net cash from operating activities was S$140.7m versus S$106.5m.

• Adjusted DPS excludes one-off realised foreign exchange gains from foreign-currency loan repayments and cross-currency swap settlements.

Outlook and guidance

• Robust accommodation demand, returning tourism, business activity and events supported the outlook; rising international flight capacity was expected to aid further growth.

• 3Q outlook was positive in Australia, China, France, Japan, Singapore, the UK and the US, supported by leisure, corporate and event demand.

• International arrivals were projected to reach 80%–95% of pre-pandemic levels by end-2023; performance was expected to remain resilient amid macroeconomic uncertainty.

• Student accommodation pre-leasing was healthy; expected rent growth was ~6% YoY for AY 2023-24. Five properties were scheduled for FY 2023 asset enhancements, with work expected to finish by 1H 2024.