CDL Hospitality Trusts - OCBC Investment 2020-04-28: Weak Performances Across Geographies

CDL HOSPITALITY TRUSTS (SGX:J85) | SGinvestors.io CDL HOSPITALITY TRUSTS (SGX:J85)

CDL Hospitality Trusts - Weak Performances Across Geographies

  • Singapore, New Zealand and Japan were among the hardest hit.
  • CDL Hospitality Trusts's RevPAR fell 15.0%-39.8% y-o-y across portfolio.
  • Near-term outlook remains dim.



1QFY20 performance was impacted by COVID-19

  • CDL Hospitality Trusts (SGX:J85)’s 1QFY20 result was significantly impacted by COVID-19. 1QFY20 revenue dropped 28.7% y-o-y to S$33.0m, with weak performances seen across its portfolio.
  • Revenue was down 35.2% for its master leases and 8.4% for its managed hotels. New Zealand (-73.9% y-o-y decline in revenue) Singapore (-35.6% y-o-y), Japan (-30.6% y-o-y) and Maldives (-24.7% y-o-y) were the hardest hit countries.
  • NPI fell 42.1% to S$19.6m, led by UK (- 84.1% y-o-y), New Zealand (-73.9% y-o-y) and Japan (-58.1% y-o-y) and Singapore (-38.5% y-o-y).


Sharp decline in RevPAR

  • In view of COVID-19, CDL Hospitality Trusts’s properties are either closed or operating at low occupancies. This severely impacted its RevPAR, with declines ranging from -15.0% to - 39.8% y-o-y.
  • For Singapore, RevPAR fell 39.8% y-o-y in 1QFY20, on the back of lower occupancy at 53.9% vs 87.2% in 4QFY19. The decline in RevPAR deteriorated further to -62.4% y-o-y for the first 22 days of Apr 2020, despite bulk-booking by government for returning Singapore residents to serve their two weeks of isolation (at lower ADR).
  • The Singapore hotels also saw cancellations and postponement of major MICE social events. However, bookings from foreign workers affected by border closures e.g. closure of Malaysia from 18 Mar to 12 May could help to provide some buffer to the sharp decline in RevPAR.



Further adjustments to DPU forecasts for FY20/21F by -32%/-14%






Chu Peng OCBC Investment Research | https://www.iocbc.com/ 2020-04-28
SGX Stock Analyst Report HOLD DOWNGRADE BUY 0.92 DOWN 1.090



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