CapitaLand Ascott Trust (HMN) Q1 2023 TU earnings summary

Executive summary

• 1Q 2023 gross profit rose 59% YoY, driven by stronger operating performance and contributions from new properties; excluding new properties, gross profit increased 53%.

• Travel recovery lifted RevPAU 90% YoY to S$127, equal to 93% of 1Q 2019 pro forma levels; Australia, Japan, Singapore and the US reached or exceeded pre-Covid performance.

• Income mix remained balanced: stable sources contributed 59% of gross profit and growth sources 41%; longer-stay assets and guaranteed rents supported resilience.

Financial highlights

• 1Q 2023 gross profit increased 59% YoY; excluding new properties, it rose 53%.

• RevPAU under management contracts and MCMGI climbed 90% YoY to S$127, reaching 93% of 1Q 2019 pro forma RevPAU.

• Stable income sources generated 59% of gross profit, while growth income sources generated 41%; the stable share was higher than in 4Q 2022 due partly to seasonally softer transient travel.

Outlook and guidance

• 2Q outlook was positive across key markets, with travel demand, corporate activity and city events expected to support occupancy and room rates.

• China travel demand was expected to improve as flight capacity recovered; global airline capacity to and from China was 11% of 2019 levels in Jan 2023 and expected to reach 25% by Apr 2023.

• Investment and portfolio reconstitution plans will remain disciplined amid macroeconomic uncertainty, with asset enhancement initiatives intended to lift property value and profitability.