Hoshino Resorts REIT (3287) Q2 2024 earnings summary

Executive summary

• Apr. 2024 revenue was ¥6,670 million, operating profit ¥2,848 million and profit ¥2,339 million; distribution per unit was ¥9,048.

• Portfolio strategy targets ¥300 billion in assets and a Hoshino Resorts-operated property share above 50%.

• June offering and OMO7 Osaka acquisition lifted asset size to ¥226.6 billion and the Hoshino Resorts-operated property ratio to 49.3%.

Financial highlights

• Revenue rose 3.7% YoY to ¥6,670 million; operating profit increased 3.9% to ¥2,848 million, ordinary profit grew 5.5% to ¥2,306 million and profit rose 7.1% to ¥2,339 million.

• Revenue mix was fixed rent ¥4,845 million (72.6%), floating rent ¥1,766 million (26.5%) and other revenue ¥58 million (0.9%).

• Rental NOI was ¥5,291 million, ¥94 million above forecast; rental NOI yield was 5.3%, 0.09 percentage points above forecast.

• Distribution per unit of ¥9,048 exceeded forecast by ¥348, or 4.0%; total distributions were ¥2,312 million.

• Operating cash flow was ¥4,165 million; investing cash flow was -¥670 million, financing cash flow -¥2,216 million and period-end cash ¥13,288 million.

Outlook and guidance

• Oct. 2024 forecast: revenue ¥7,466 million, operating profit ¥3,482 million, profit ¥2,662 million and distribution ¥9,100 per unit.

• Apr. 2025 forecast: revenue ¥7,540 million, operating profit ¥3,407 million, profit ¥2,668 million and distribution ¥9,120 per unit.

• Outside-operated properties are expected to continue recovering, supporting higher rents at Grand Hyatt Fukuoka and ANA Crowne Plaza Hiroshima versus the prior year.

• Hoshino Resorts-operated properties are expected to remain affected by labor shortages; expanded recruitment was targeted from May 2024. Offering-related growth is expected to support the Apr. 2025 distribution forecast.

• Forecast distributions assume partial reversal of the tax-purpose reserve; actual results and distributions may vary with circumstances.