Ascott Residence Trust - OCBC Investment 2019-11-01: In-line Results

ASCOTT RESIDENCE TRUST (SGX:A68U) | SGinvestors.io ASCOTT RESIDENCE TRUST (SGX:A68U)

Ascott Residence Trust - In-line Results

  • Portfolio RevPAU fell 2% y-o-y.
  • Gearing stands at 33.0% as at 30 Sep.
  • Merger is expected to complete in Dec.



Stable 3Q results

  • ASCOTT RESIDENCE TRUST (SGX:A68U) reported lower 3Q19 revenue of S$132.4m (-2% y-o-y), due to lower contribution (-S$2.3m) from the divestment of Ascott Raffles Place Singapore. Gross profit increased by 1% y-o-y to S$65.0m, mainly due to new accounting standard FRS 116 effective from 1 Jan 2019. See Ascott Residence Trust Announcements
  • 3Q DPU rose 5% y-o-y to 1.91S cents. Excluding one-off divestment gains, 3QFY19 DPU was up 1% y-o-y to 1.73S cents, making up 24.5% of our full-year forecast, which we consider within expectations. See Ascott Residence Trust Dividend History.


Mixed performances

  • Ascott Residence Trust's portfolio RevPAU decreased by 2% y-o-y to S$155, dragged by weaker exchange rates i.e AUD, GBP.
  • Standouts include UK and Vietnam which saw a 9% RevPAU increase, largely driven by stronger corporate demand as well as leisure demand in the case of UK. Singapore also reported 2% y-o-y RevPAU growth in 3Q, aided by stronger demand, partially offset by higher costs.
  • On the other hand, Ascott Residence Trust’s portfolio RevPAU was dragged by Australia (-15% y-o-y), China (-6% y-o-y) and US (-6% y-o-y). For Australia, the lower RevPAU was attributable to the softer demand in Melbourne, and the acquisition of Citadines Connect Sydney Airport, which has lower RevPAU compared to existing properties in Australia. Excluding Citadines Connect Sydney Airport, RevPAU would have fallen 4% y-o-y. China’s RevPAU were impacted by weaker corporate demand while US’ hotels RevPAU were weighed by competition from new supply.


Higher Fair Value estimate of S$1.41






OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2019-11-01
SGX Stock Analyst Report HOLD MAINTAIN HOLD 1.41 UP 1.310



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