Ascott Residence Trust: 2Q15 results missed our expectations
- Ascott Residence Trust (ART) reported its 2Q15 results which missed our expectations.
- Revenue grew 12% YoY to S$98.7m, underpinned by additional contribution from acquisitions made in 2014; while DPU slipped 5% to 2.09 S cents.
- However, if we adjust for a one-off item in 2Q14, DPU would instead have increased by 5%.
- For 1H15, revenue also rose 12% to S$188.7m, and this formed 47.8% of our FY15 projection.
- DPU of 3.85 S cents represented a decline of 2% (but growth of 3% after adjusting for the similar oneoff item in 2Q14), and constituted 46.6% of our full-year estimate.
- ART’s portfolio RevPAU fell 6% YoY to S$129 due to weakness in Singapore and Philippines, coupled with lower average daily rate from properties acquired in 2014.
- Looking ahead, we expect ART’s proposed acquisitions of serviced residence properties in Australia and Japan, rental housing properties in Japan, and an extended-stay hotel property in New York to buffer the organic softness and boost its future income streams.
- Maintain BUY on ART, but we will review our S$1.44 fair value estimate.
(Wong Teck Ching Andy)
Source: http://www.ocbcresearch.com/
