CDL HOSPITALITY TRUSTS (SGX:J85)
CDL Hospitality Trusts - Awaiting Mass Vaccination
- CDL Hospitality Trusts' 2H20/FY20 DPU fell 29.2%/45.1% y-o-y.
- Distribution of S$20m capital gains.
- Singapore, New Zealand and Australia performed better.
CDLHT's 2H20 results beat expectations on top-up of S$20m
- CDL Hospitality Trusts (SGX:J85)'s 2H20 results beat expectations on S$20m of capital distributions. 2H20 revenue and net property income dropped 36.5% and 46.2% y-o-y to S$65.5m and S$39.6m respectively, weighed by lower contributions across CDL Hospitality Trusts’ portfolio.
- CDL Hospitality Trusts distributed partial divestment gains of S$20m to smoothen out the impact of COVID-19 and divestments. As such, 2H20 DPU fell 29.2% y-o-y 3.44 cents.
- On a full-year basis, CDL Hospitality Trusts' FY20 DPU decreased by 45.1% y-o-y to 4.95 cents or 147% of our estimates, beating our expectations.
Singapore and New Zealand performed better, supported by isolation business
- RevPAR remained soft in 4Q but improved q-o-q, with the exception of hotels in UK, Germany and Italy which were impacted by new lockdowns imposed in 4Q20. Overall, Singapore and New Zealand performed better, aided by isolation business which could continue to support the occupancy through 1Q21.
- For Singapore (excluding W Hotel), RevPAR was down 59.7%/54.4% y-o-y in 2H20/FY20. Including W Hotel, RevPAR would have fallen 53.5%/51.4% y-o-y in 2H20/FY20. With the exception of New Zealand and Australia (largely on fixed rent), CDL Hospitality Trusts’ overseas market performances were generally weaker, with RevPAR falling between 19.2-85.5% y-o-y.
- In light of COVID-19, CDL Hospitality Trusts restructured its lease in Italy (one hotel) from 2020 to 2024 to lower its fixed rent component and is working to restructure its lease in Germany (one hotel) as well.
Healthy balance sheet
- As at 31 Dec 2020, CDL Hospitality Trusts’s gearing stood at 37.5% with debt headroom of S$689m, assuming a gearing limit of 50%. CDL Hospitality Trusts has ~S$60m of undistributed divestment gains which could be used to mitigate the impact of COVID-19 and smoothen out DPU.
- While performance in Europe is likely to remain weak in 1Q21 with the resurgence of COVID-19 cases, it only contributed 18%/6% of FY19/20 NPI.
- The roll-out of vaccines, progressive reopening of borders, support from isolation business, and more stabilised COVID-19 situations in Singapore, New Zealand and Australia (80%/98% of FY19/20 NPI) could provide some buffer.
- See CDL Hospitality Trusts Share Price; CDL Hospitality Trusts Target Price; CDL Hospitality Trusts Analyst Reports; CDL Hospitality Trusts Dividend History; CDL Hospitality Trusts Announcements; CDL Hospitality Trusts Latest News.
- After adjustments, our fair value estimate for CDL Hospitality Trusts increases marginally from S$1.39 to S$1.40.
Chu Peng
OCBC Investment Research
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https://www.iocbc.com/
2021-02-01
SGX Stock
Analyst Report
1.40
UP
1.390
