CapitaLand Ascott Trust (HMN) H2 2023 earnings summary

Executive summary

• FY 2023 DPS rose 16% YoY to 6.57 cents; adjusted DPS excluding realised exchange gains increased 14% to 5.44 cents.

• FY RevPAU rose 23% YoY to S$148, reaching pre-pandemic levels; 2H RevPAU was S$157, or 103% of 2H 2019 pro forma levels.

• Portfolio valuation increased ~2% to S$8.7b, with a gross fair value gain of ~S$156m despite higher capitalisation and discount rates.

• Portfolio comprised 106 properties across 45 cities in 16 countries, with >19,000 units and S$3.7b market capitalisation at 31 Dec 2023.

Financial highlights

• FY 2023 revenue rose 20% YoY to S$744.5m and gross profit increased 20% to S$338.2m.

• FY 2023 total distribution increased 25% YoY to S$237.0m; 2H distribution rose 24% to S$140.8m.

• 2H revenue and gross profit each grew 12% YoY to S$397.6m and S$183.9m, respectively; 2H gross profit reached 106% of 2H 2019 pro forma levels.

• Adjusted DPS was 3.00 cents in 2H 2023 versus 3.00 cents in 2H 2022; FY adjusted DPS was 5.44 cents versus 4.79 cents.

Outlook and guidance

• 1Q 2024 lodging demand outlook was cautiously positive, supported by concerts, citywide events, and corporate and leisure travel; slower economic growth and geopolitical tensions tempered expectations.

• International travel was projected to fully recover to pre-pandemic levels in 2024; Singapore demand was expected to be subdued in 1Q, while China’s recovery depended on improving flight capacity.

• Longer-stay accommodation target is 25–30% of portfolio value, versus ~17% at 31 Dec 2023; Somerset serviced residence at Clarke Quay was slated for completion in 2H 2025.

• Eight properties were undergoing or scheduled for AEI; Robertson House completion was on track for 1Q 2024, with seven other AEIs scheduled for 2024–2026.