CapitaLand Ascott Trust (HMN) H1 2024 earnings summary

Executive summary

• 1H 2024 revenue rose 11% YoY to S$386.4m and gross profit rose 12% to S$172.9m, supported by stronger lodging operations and new-property contributions.

• Total return rose to $87.9m from $69.0m, while net income was $84.3m versus $94.0m.

• The S$8.5b portfolio spanned 16 countries and 102 properties; Asia Pacific represented 54% of assets and the Americas 20%.

Financial highlights

• Revenue was S$386.4m versus S$346.9m and gross profit was S$172.9m versus S$154.4m; same-store revenue rose 4% and gross profit rose 3% YoY.

• Total distribution was S$96.5m versus S$96.3m; adjusted total distribution, excluding realised FX gains from swap settlements, rose 8% to S$91.0m.

• Reported DPS was 2.55 cents, down 8% YoY from 2.78 cents; adjusted DPS was 2.41 cents versus 2.44 cents.

• Finance costs rose to $53.6m from $41.7m; net cash generated from operating activities was $137.4m versus $140.7m.

• Divestment profit was $26.5m versus $41,000 in 1H 2023; both periods included divestment-related items.

Outlook and guidance

• Lodging demand outlook was cautiously positive as pent-up travel demand moderates and regular travel patterns and seasonality return; 2024 international arrivals are projected to exceed pre-pandemic levels by 2%.

• Remaining asset enhancements are expected to complete in phases through 2026; Somerset at Clarke Quay is slated for completion in 2026.

• Average cost of debt is expected to remain stable at ~3% through end-2024, with gearing expected below 40%.

• Outlook varies by market: stronger Paris ADR during the 3Q 2024 Olympics, healthy Japan demand and improving US corporate demand; Australia faces a lighter events calendar and a higher base.