OUE Hospitality Trust beats revenue forecast for 1Q 2014

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Singapore-listed stapled security OUE Hospitality Trust (OUEHT) (SGX:SK7) announced a distribution per share (DPS) of 1.68 Singapore cents for its 1Q 2014, a 4.3% variance from the original forecast of 1.61 Singapore cents.

The distribution comes on the back of gross revenue which came in at SGD28.7 million, beating the trust’s earlier estimate of SGD28.3 million. Subsequently the trust recorded a net property income (NPI) for the quarter of SGD25.6 million, a 2.7% variance from the forecast of SGD25 million.

Management of OUEHT attributed the figures to mainly to higher master lease revenue from Mandarin Orchard Singapore. The rental income of OUEHT’s REIT component is pegged to a percentage of gross operating revenue and gross operating profit of the hotel.

The hotel’s move to increase room revenue from the corporate guests segment has also increased the number of corporate meetings held in the hotel contributing to higher food & beverage (F&B) sales. F&B revenue was also higher from increased banquet sales.

The Singapore Airshow 2014 also bolstered occupancy levels for the quarter and pushed RevPar to SGD248. However this was lower than the SGD257 forecast due to the impending Indonesian parliamentary elections, putting a stem to visitor arrivals from the country.

Gearing for OUEHT stands at 32.2%.

OUE H-Trust indicated that remains positive on the corporate travel, tourism and retail segments in Singapore for 2014 with the opening of the Sports Hub and general improvements in visitor arrival numbers.

Book closure date for distribution closes on 14 May while distribution payment is scheduled for 6 June. Units of OUEHT closed the trading day at SGD0.875 on the Singapore Exchange.

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